Balancing Risk and Rights : The Constitutional validity of Premium Discrimination in Life Insurance

Abstract

This dissertation will explore the constitutional validity of premium discrimination within the life insurance industry and examine whether premium discrimination can be legally and ethically justified. Premium discrimination in insurance law refers to the practice of charging higher premiums to individuals or groups based on characteristics such as age, gender, health status, or occupation. Insurance companies typically use this practice to adjust their pricing based on the perceived risk that individuals with specific characteristics are more likely to make a claim on their insurance policies than others.1 Discrimination extends beyond simple distinction or differentiation, involving biased actions that result in unjust treatment toward individuals.2 Premium discrimination can result in unfair pricing, with some individuals or groups being charged significantly higher premiums despite not necessarily posing a higher risk to the insurer. To combat this issue, some countries have laws and regulations in place that prohibit or restrict premium discrimination in specific contexts, such as health insurance or auto insurance. This study aims to assess the legal and ethical issues surrounding the practice of premium discrimination and to analyse the implications for the life insurance industry and the public. This dissertation will review existing legal and ethical literature and survey current industry practices. This research aims to contribute to the professional knowledge and practice of life insurance. It may be used to make informed legal and ethical decisions regarding premium discrimination.