The ECJ is set to announce its decision on whether to ban gender-based underwriting on 1 March and the FSA has warned that advisers, intermediaries and consumers will be hit along with insurance firms, if such a ruling was made.
However, the FSA does not expect firms to change their products or pro-actively communicate with customers before the 1 March deadline, but does recommend they respond to any customer concerns and queries.
Mortgage Solutions’ sister title COVER previously revealed that some insurers may be forced to close to new business once the ruling is passed while they update their systems.
In addition, advisers fear it could lead to ‘wild west’ chaos.
In its February Life Insurance newsletter, the FSA noted that term life, critical illness and private medical insurance (PMI), alongside annuities and motor cover, were most likely to be affected by the outlawing of gender-based underwriting.
It warned that the sale and rating of other products may also be affected.
The regulator explained: “We do not expect firms to make any immediate changes to their policies or to pro-actively communicate with customers in advance of 1 March 2011, although we would expect customer concerns and queries are responded to.”
It added that it would communicate further after the judgment. In the mean time, it expects firms to ‘keep up-to-date with any developments that may affect their business and have plans in place to be able to react to such developments while maintaining adequate levels of service and care to consumers’.
Previously, the FSA had said it believed the use of gender as a rating factor was appropriate when based on and supported by relevant actuarial and statistical data and was in line with current UK gender legislation and the EU Gender Directive.
