Government confirms insurance exemption from age legislation

Insurance companies will continue to be allowed to use age as a criterion when offering or pricing cover, the government has announced.

Financial services is one of two key areas that will be exempted from the Equalities Act, which comes into force in April 2012. The act makes it illegal to deny goods or services to customers on the basis of how old they are.

But, as revealed in Insurance Times last month, guidance issued for consultation by the government’s Equalities Office gives insurance companies a get out clause from the legislation.

The consultation on how the act will apply to the provision of goods and services, says insurance companies will still be permitted to use age as a basis for assessing risk and pricing

However, it also says companies will have to base such decisions on solid evidence rather than simply imposing a blanket ban. And decisions to use age as a criteria for offering or pricing cover must be based on information from a source which can reasonably be relied on, the guidance stipulates.

In addition, insurers will be asked to help people find an alternative provider if they are unable to provide cover for age-related reasons.

Equalities minister Lynne Featherstone said: “It’s high time we put an end to outdated stereotypes based on age and recognised the valuable contributions that people of all ages can make to our society and economy. When older people are turned away from the market place through unfair treatment, the economy misses out on increased business and revenue.

“These proposals will ensure that doesn’t happen, providing new protection and support for people of all ages. However, we don’t want to throw the baby out with the bathwater, which is why we will allow businesses to continue to provide the age-specific services that many people of all ages benefit from every day.”