Over the last couple of years there has been considerable disquiet about the way that renewals for many black and minority ethnic (BME) solicitors' firms has been handled by insurers and brokers. The Association of British Insurers (ABI) and the British Insurance Brokers Association (BIBA) have both been engaged in discussions with the SRA, The Law Society, the Equality and Human Rights Commission, and the FSA to examine what has happened and to ensure that there is no unlawful discrimination in either the processes or the decisions made by insurers and brokers.
This note aims to provide some basic guidance about avoiding unlawful discrimination, and accompanies the guidance notes to the Equality Act 2010, which will be published shortly by ABI.
General Guidance for insurers and brokers
The relevant laws for Insurers and brokers on discrimination are most particularly Sections 9 (race) and 29 (provision of services and public functions) of the Equality Act 2010.
These are requirements not to directly discriminate, and that any indirect discrimination must be justifiable.
Sensitivities include the particular needs of different ethnic groups and there should be processes in place to deal with questions and complaints.
What insurers can do
• Help make proposers aware of the market conditions that have influenced your current underwriting strategy
• Use all reasonable endeavors to design proposal forms that are clearly worded, leaving no room for misunderstanding
• Communicate your decisions as clearly as possible
• Communicate your decisions without undue delay
• Avoid using language that may be seen as inflammatory or discriminatory
• Be understanding and straightforward with all solicitors who approach you and work with brokers to communicate in a clear, fair and not misleading manner
What brokers can do
• Where appropriate explain to proposers to make them aware of current market conditions, what has led to them, including the recent claims environment, the problems associated with the Assigned Risks Pool, and the lack of change to the minimum terms for 2011
• Work with the proposers so that as far as is reasonably possible proposal forms are completed comprehensively and correctly
• Impress on customers the benefits of early submission of proposal forms and the risks associated with late submission
• Use reasonable endeavors to notify customers of Insurer's decisions promptly and that the reasons are communicated directly
• If appropriate help your proposer to understand how strong risk assessment and management procedures in their firm can help them to demonstrate to an insurer that they are a good risk.
For more information please contact:
020 7397 0218