The Government’s new Equalities Bill aims to put an end to age discrimination in England, Wales and Scotland. It will consolidate previous discrimination law into a single piece of legislation.
Under the new law, insurers will be barred from rejecting older people who apply for travel insurance, or charging extortionate premiums.
Some have welcomed the idea, others have warned of doom and disaster if it becomes law.
Will it become law?
Unless we have a snap election it will become law soon. All political parties support the concept.
Do we know full details?
No
Won’t insurers just put an age limit on policies?
Lawmakers are not daft. They intend to prevent any sneaky insurer doing this by banning upper age limits.
Insurers have threatened to stop offering policies, can they?
They can pull out of the entire travel insurance market if they want. But with 600 providers, and thousands of policies, losing a few marginal insurers will have no effect.
Mass withdrawal is never going to happen.
To threaten mass withdrawal, or the big insurers suddenly all increasing premiums, could both be held to be in breach of Competition laws.
New players will always pounce on opportunities.
So a 78 year old will pay the same as an 18 year old?
This could happen, but is unlikely. Insurers will probably still be allowed to charge higher premiums for older people.
However, the reforms will prevent companies from hiking premiums for older people to unreasonable levels.
The industry often quotes claims figures of how much older travellers cost in claims. It is very unclear on how accurate, or indeed how ancient these figures are. The insurance world is full of historical prejudices based on ‘fact’ which, when investigated, turn out to be nothing of the sort.
Insurers will have to justify extra premiums. If they can rely on trade figures generally, then those figures are going have to be a lot more up to date and detailed than any now made public.
Insurers may have to justify the premium based only on their own claims records, which will be impossible for new entrants and difficult for most insurers
Is the government going to change its mind?
After several years of headlines showing blatant insurance discrimination against older travellers, I doubt it.
Travel insurance: Hot Topic: July 2008
