The impact on the insurance sector of the Government’s new Equalities Bill is quite questionable; the bill, which aims to put an end to age discrimination in England and Wales while at the same time allowing employers to discriminate in favour of female and ethnic minority job applicants.

The proposals were outlined in the House of Commons yesterday and will consolidate previous discrimination law into a single piece of legislation. Under the new law, insurers will be barred from rejecting older people who apply for motor and travel insurance. In addition, the reforms will prevent companies from hiking premiums for older people to unreasonable levels.

The director general of the Association of British Insurers, Nick Starling, has responded to yesterday’s statement by Harriet Harman, Minister for Women and Equality, by agreeing with the Bill in principle. However, he warns that it could be harmful to the insurance industry if it is poorly implemented.

Mr. Starling believes competition could be reduced because some insurers may withdraw certain products altogether and that this in turn would increase premiums for all age groups.