Advisers launch gender neutral pricing good practice guide
Advisers have created a draft statement of good practice for insurers in the run up to gender neutral pricing to make sure customers are treated fairly in the transition.
The statement has been created by the Finance & Technology Research Centre, which is led by advisers.
In March last year, the European Court of Justice ruled that insurance companies should no longer charge separate rates for insurance for males and females. Protection experts have predicted this could result in higher life insurance rates for women. Insurers have until 21 December to cease rating by gender.
The draft statement says insurers should:
- Confirm their action plans to advisers no later than the 21st June 2012, allowing six months lead time.
- Confirm if the directive will affect underwriting of new plans and also premium rates and underwriting for plan amendments and re-instatements.
- State the date on which they propose to move to gender neutral pricing at the earliest opportunity.
- Confirm whether policies need to be on risk or just informed of the start date.
- Look to indicate post G-Day premium rates on quotations.
- Make it clear that quotes are valid for 30 days or until the December 21, whichever is sooner.
It also states insurers should dedicate part of their websites to showing how they will deal with business volumes in the run-up to “G-Day” and provide advisers with sales aids to communicate the changes to clients.
The draft statement is now under consultation and a final version will be agreed later this month.
F&TRC managing director Ian McKenna says: “We met last month it soon became clear that the key issue on their minds was making sure the impacts of the ECJ gender ruling are properly managed. We have built a draft list of requirements for insurers to consider and welcome any additional feedback from across the protection industry in the coming weeks.”
The advisers which have worked on the project so far include: Master Adviser, LifeSearch, London & Country, Direct Life & Pensions, Vita Financial, Sesame and Spicer Haart.
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Advisers need to be aware of the implications of the recent OFT review of insurance companies.
Providers are not permitted to announce future pricing plans (in order to prevent price-fixing activity). Points 3 and 5 are potentially non-compliant. It is unlikely that current market information-sharing practices would mean this could be done without the providers being at risk of breaching the regulation.