Age Related Insurance Premiums and The Human Rights Act
The Human Rights Act 1993 prohibits discrimination on grounds of age. Over recent years, the Human Rights Commission received a large number of complaints from people who claimed that health insurance premium increases, at age 65, were discriminatory.
Age related pricing seems, on the face of it, to be at odds with prohibiting discrimination on the grounds of age. But the Human Rights Act contains, in section 48, a specific exception relating to insurance. What it means, broadly speaking, is that health insurers are allowed to increase premiums for older people provided the increases are reasonable, having regard to actuarial data and other relevant factors (an actuary is a person qualified to calculate commercial risks and probabilities involving uncertain future events).
Following a case last year involving the Human Rights Commission and three insurance companies, this point was confirmed and clarified. Before the case got to trial, agreement was reached that the system for pricing needed to be better structured. The following points were agreed on:
- the three insurance companies are to co-operate with the NZ Society of Actuaries and the Government Actuary in developing actuarial guidelines regarding health insurance;
- each insurer will also co-operate in developing health insurance guidelines to be formulated by the Human Rights Commission. These guidelines will include the actuarial guidelines and will be developed in consultation with the Health Funds Association of NZ, Age Concern and Grey Power; and
- insurers who comply with these guidelines, generally, would be legally presumed to comply with the Human Rights Act as well.
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