The UK Insurance industry operates in a complex legislative environment that
impacts many types of insurance product and the way that insurance services
are offered to the public. 2012 looks set to be a busy year for insurers
trying to accommodate legislative changes in their product pricing.
From the start of the new fiscal year (6th April) there will be several
changes affecting employment law and therefore income protection insurance.
New rules about taking action in Employment Tribunals will make it more
expensive to challenge employment terminations, and from the same date, new
starters will have no access to tribunals for 24 months instead of the
current 12. This could affect the price and cover offered in many income
protection policies.
More sweeping changes are likely in December when a ruling by the European
Court of Justice comes into effect. At the moment, UK insurers have an ‘opt
out’ clause in the European ‘Directive on Equal Treatment’ (reference
(2004/113/EC) more usually known as the Gender Directive). This opt out
clause allows them to consider gender when assessing and pricing insurance
risks. From the 21st December 2012, this opt out will be revoked.
The net outcome is that any insurance policy that currently includes gender
as a risk factor is likely to be affected.
Michael Day of Endsleigh Insurance explains; “The biggest impact is likely
to be on motor insurance where young women may see prices rising by around
25 percent while young men benefit from a 10 percent saving. However,
unemployment and income protection policies, pensions and annuities, and of
course life insurance prices and benefits are all likely to be impacted.”
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