Executive Summary

1.1 RBS Insurance welcomes the Government’s proposals to review and consolidate equality legislation to provide a coherent framework tackling harmful discrimination.

1.2 RBS Insurance comments on two parts of the proposals:
- Chapter 9: Age discrimination;
- Annex B: Implementation of the Gender Directive.

1.3 Insurance premiums reflect the probability and severity of loss on a policy, which is determined by performance statistics. The more likely a loss will occur, and the larger the claim, the higher the premium. For most insurance products, such as travel insurance, there is a direct correlation between age, poor health and claims.

1.4 RBS Insurance does not believe its products are an example of harmful age discrimination. Therefore, we do not believe legislation would be the most proportionate or appropriate method to tackle the problem. However, we welcome the Green Paper’s recognition that insurance is an example of legitimate age differentiation and we urge the Government to retain an exception for insurance should they decide to introduce legislation.

1.5 A more appropriate measure would be an agreement between the Government and insurance industry to publish actuarial/statistical data which justifies differential treatment on the grounds of age, similar to the provisions that apply in sex and disability discrimination law. Alongside this, industry-led measures can tackle areas of concern, such as the ABI Task Force to improve signposting for older customers.

1.6 The implementation of the Gender Directive requires insurers to redraft and reprint policy documentation. In order to implement the necessary changes, RBS Insurance urges the Government to defer the introduction of the ban on pregnancy/maternity costs to December 2009, as the Directive allows. A notice period of around three months would be inadequate to deliver these changes, which is an industry-wide problem.

1.7 For the purposes of the Sex Discrimination Act provisions covering goods and services, ‘maternity’ should be defined as childbirth in relation to travel insurance. Any other definition, without an exemption for travel insurance, could result in travel insurers being liable for further costs associated with an emergency overseas claim for pregnancy for a year after the birth, including when the policyholder returns to the UK.