Life Insurance: Mental Illness

(asked on 1st November 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps the Government is taking to ensure that people with a mental health disability under the Equality Act 2010 are not denied life insurance cover as a result of their disability or for other discriminatory reasons.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 4th November 2021

The Government is determined that all insurers should treat customers fairly.

Under the Equalities Act 2010, an insurance provider cannot refuse to cover potential customers or charge more for insurance on the basis of an applicant’s mental health problem, except in specified circumstances as set out in the legislation.

The Financial Conduct Authority (FCA) sets the conduct standard required of insurance firms in relation to their business. They require firms dealing with all customers, including those with mental health issues and other vulnerabilities, to act honestly, fairly and professionally in accordance with their customers' best interests; to pay due regard to the interests of their customers and treat them fairly; and communicate information to them in a way which is clear, fair and not misleading.

Where the FCA becomes aware that firms are treating customers, including customers with vulnerabilities such as mental health issues, unfairly, they will consider this on a case-by-case basis and use the full range of regulatory and supervisory powers to put things right. They are authorised to impose fines, order injunctions, bring criminal prosecution and issue public censure when disciplinary action against a firm or individual is taken. The FCA sets out their enforcement powers on their website.

The FCA has placed access and vulnerability at the core of its Mission and Business Plan. In February 2021, the FCA published its guidance for firms on the treatment of vulnerable consumers, including those with mental health conditions. This can be accessed here: https://www.fca.org.uk/publications/finalised-guidance/guidance-firms-fair-treatment-vulnerable-customers

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