Kathleen Lynch (Cork North Central, Labour) | Oireachtas source

I am pleased to present to the House the Equal Status (Amendment) Bill 2012, which will give effect in Ireland to the mandatory introduction within the EU of unisex premiums and benefits in private insurance to which Council Directive 2004/113/EC applies. This directive, informally known as the gender goods and services directive, implements the principle of equal treatment between men and women in access to and supply of goods and services. In its decision of 1 March 2011, in a case taken by a Belgian consumer rights organisation, the Court of Justice of the European Union declared that Article 5(2) of the directive would be invalid with effect from 21 December 2012. This decision, known as the Test-Achats ruling, is binding on all member states of the EU. The provision that was struck down had allowed an exception from the principle of equal treatment enunciated in the regulation so that insurance companies could price life and motor insurance products differently for men and women, where this difference is reasonable and supported by actuarial or statistical data. Ireland availed of this exemption in the Equal Status Act 2000, permitting gender differentiation to continue in the areas of motor insurance, life assurance, critical illness cover, income protection cover and private annuities and pensions.

The effect of the ruling is that Ireland is obliged to prohibit, by law, the selling of private insurance products which differentiate, by gender, on price or benefits and to have such provisions in force on or before 21 December 2012. The unisex rule will apply to all contracts concluded for the first time as and from that date. It also applies to agreements between parties as and from 21 December 2012 to extend contracts concluded before that date, which would otherwise have expired. The European Commission has issued guidance on the application of this judgment on national legislation transposing Council Directive 2004/113/EC and on insurance industry practices.

I have taken due regard to this guidance - and to the intention stated in the directive to avoid a sudden readjustment of the insurance market - in determining the amendments to the Equal Status Acts necessary to ensure compliance with the ruling. As I will explain, these amendments are largely technical in nature. For me and my colleagues in government, this ruling highlights the crucial importance of achieving legal clarity in the drafting of legislation at European level to ensure that such instruments are interpreted and have the impact intended. The Government is conscious of the potential for confusion and misinformation among consumers and insurance providers alike of these changes to the private insurance market. For this reason, in October the Department of Justice and Equality published an information note for consumers on the new rules on the permitted use of gender by insurance providers and sources of further information and advice. The information note is widely available through public information channels such as the Citizens Information Board. It is also available on the Department's website. I wish to again express our thanks to the industry bodies - the Irish Insurance Federation, the Irish Brokers Association, the Professional Insurance Brokers Association and the Society of Actuaries in Ireland - which, along with the Departments of Finance, Jobs, Enterprise and Innovation and Social Protection, the Central Bank, the National Consumer Agency, the Citizens Information Board, the Pensions Board, the Equality Authority and the Financial Services Ombudsman's Bureau, contributed to the preparation of this advice for consumers.

In some quarters, the potential for this change to lead to increases in the premiums charged, not least in motor insurance and life assurance, has given rise to concern. The Government takes seriously concerns expressed about the risk that some providers might seek to exploit the change to maximise their profits to the detriment of consumers. It was made very clear to the industry - in consultations on the Bill - that the State's consumer protection and insurance regulatory bodies do not view such developments favourably. The Central Bank, the National Consumer Agency and the Competition Authority each has specific statutory roles in promoting and protecting consumer interests, which will be engaged as needed. This is in addition to the investigative and advisory powers of the Equality Authority in respect of discriminatory practices by insurance providers and the existing individual complaints mechanism under the Equal Status Acts, which will continue to apply.

I should stress that it has also been made very clear to the industry that the European Commission intends to monitor the evolution of the insurance market and of overall price levels post-December 2012. The Commission has not ruled out taking appropriate action in the event of anti-competitive conduct by insurance providers.

I now wish to highlight some of the main provisions of the Bill. Section 2 provides for the amendment of section 5 of the Equal Status Act 2000. It limits the existing derogation from the prohibition on gender discrimination in specified insurance products - provided in section 5 of the Equal Status Act - to contracts concluded before 21 December 2012. This is to ensure that the prohibition on gender-differentiated insurance, with effect from 21 December 2012, will not affect existing contracts lawfully entered into before that date. The scope of the prohibition is then expanded by providing in a new subsection (4A) that all contracts within the categories of motor or life insurance concluded for the first time as and from 21 December 2012 must comply with the unisex rule.

For the avoidance of doubt - and because to determine otherwise would result in a sudden readjustment of the motor insurance market, contrary to the intention of the directive - the second paragraph of the new subsection provides that mid-term adjustments to motor insurance contracts concluded before 21 December 2012 are not considered to be new contracts for this purpose. The section also provides that the obligation imposed on the Central Bank of Ireland to compile, maintain and publish data to support the existing derogation will cease to have effect from 21 December 2012. The bank's obligation to maintain and publish data compiled before that date will not be affected. Consequential to the cessation of this obligation, section 5 provides for the amendment of section 41 of the principal Act. This section will have the effect of terminating the Minister's power, which is no longer required, to make regulations in respect of the data to be compiled, published and maintained by the Central Bank.

Section 3 provides for the amendment of section 14 of the principal Act in order to clarify that insurance providers may continue to collect, store and use gender status or gender-related information which is bona fide intended for the purposes of reserving and internal pricing, reinsurance pricing and life and health underwriting. For example, it is envisaged that insurance providers may continue to gather and use gender data in connection with offering gender-specific insurance products and options within contracts to cover conditions, such as breast cancer or prostate cancer, which exclusively or primarily concern males or females.

I have also taken the opportunity afforded in this Bill to address a minor procedural issue regarding equal status complaints referred to the Equality Tribunal for mediation. Section 4 provides for the amendment of section 24 of the 2004 Act to extend the time available to persons who have referred such complaints to apply for resumption of the hearing in instances in which mediation has not resolved the dispute between the parties. The amendment will extend the period after the issuance of a notice of non-resolution within which a complainant is allowed to make an application in writing for a resumption of the hearing from 28 days to 42 days. This amendment applies the same conditions to complaints under the Equal Status Acts on failure of mediation which are already applicable to the resumption of complaints under the Employment Equality Acts. The remaining provisions contained in the Bill are of a standard or technical nature.

I reiterate that the State has no option but to ensure that national law complies with the European Court of Justice's interpretation of the gender goods and services directive in this instance and I again draw the attention of the House to the essentially technical nature of these amendments. I thank Senators for their attention and I look forward to the detailed discussions on the legislation. I commend the Bill to the House.