Introduction
On 2 July 2008 the European Commission issued a draft directive on anti-discrimination. This directive will prohibit discrimination on grounds of religion, belief, disability, age or sexual orientation in areas outside employment.
If the directive is implemented, every EU member state will be required to put into their national law prohibitions on such discrimination.
The draft directive includes the following provision that would apply to insurance (Article 2 para. 7):
"Notwithstanding paragraph 2, in the provision of financial services Member States may permit proportionate differences in treatment where, for the product in question, the use of age or disability is a key factor in the assessment of risk based on relevant and accurate actuarial or statistical data."
Key issues
The impact of the proposal is mitigated by the fact that EU insurers are already subject to a range of national anti-discrimination provisions.
Nevertheless, the directive will restrict an insurer's ability to use age or disability as factors affecting risk when underwriting classes such as motor, travel, life or health.
The EU insurance industry has the following concerns about the draft directive’s financial services exemption (see above):
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It requires age or disability to be key factors in the assessment of risk to be permitted. This could rule out their use where other risk assessment factors also apply.
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Insurers can rely on a range of relevant sources, including medical reports, research and experience. The exception only recognises actuarial and statistical data.
- The provision allowing member states to decide whether or not to include the financial services exemption in national laws could create legal uncertainty and create an obstacle to the cross-border activities of the insurance industry.
Implementation
The right to equal treatment is a general principle of community law. European legislation already prohibits discrimination on grounds of race and sex and, in relation to employment, on other grounds. Most Member States have their own laws containing further prohibitions on discrimination. This proposal will address differences in the level and of protection from discrimination.
The European Parliament has repeatedly called on the commission to present anti-discrimination proposals and pressure to act has also been brought by Non-Government Organisations. The Commission carried out consultations with interested parties in 2007 and the proposal for a directive was accompanied by an Impact Assessment. The Impact Assessment covers, in relation to insurance, discrimination relating to disability, age or sexual orientation.
The proposed directive has been sent to the European Parliament and Council for co-decision.
Further information
Details of the European Commission Impact Assessment and responses to the public and stakeholder consultation on non-discrimination measures, as well as the proposal for this directive can be found on the Commission website.
