DISCRIMINATION BASED ON AGE IN VEHICLE INSURANCE IS PROHIBITED - WHAT DOES THE LEGISLATION PASED BY PARLIAMENT PROVIDE? - Filenews 5/3
The Plenary Session of the Parliament passed the bill, which was submitted by Nicosia MP Alexandra Attalidou, which prohibits the arbitrary and unjustified refusal by insurance companies to conclude an insurance contract with persons requesting coverage for vehicles, based on age.
49 MPs voted in favour and Onoufrios Koullas, a DISY MP, arguing that the legislation is not going to solve the problem. At the same time, a DISY amendment on the issue of documented justification was rejected.
The law establishes an obligation for insurance companies to provide a clear and documented justification in case of refusal to conclude an insurance contract and to notify it to the interested party
During the discussion in the committee, the text of the draft law was amended and strengthened with additional provisions. Among other things, the prohibition of age discrimination in motor vehicle insurance is explicitly provided, as well as the possibility of temporarily maintaining the existing insurance contract.
In addition, a time limit is established within which the insurer must justify its decision in the event of termination of an insurance contract.
The legislation also provides for a procedure for submitting and examining complaints from affected policyholders, as well as an obligation for insurance companies to submit data on an annual basis.
In case of non-compliance with the provisions of the legislation, the imposition of administrative fines is provided.
Rapporteur Alexandra Attalidou said that the proposed law sets the basic limit that age alone cannot be a reason for refusing vehicle insurance. He stressed that the actuarial assessment of risk is not abolished, but there is a need for documentation and proportionality. He noted that drivers over 70 are involved in a small percentage of collisions, yet many face insurance denial or exorbitant premium increases. He argued that compulsory insurance is a prerequisite for the autonomy of citizens and called on the Parliament to choose equality instead of tolerance of discrimination. He also disagreed with DISY's amendment, arguing that it shifts the burden to citizens instead of insurance companies.
DISY MP Haris Georgiadis explained that the DISY amendment proposes that the written justification for changes to an insurance contract should be given only if requested by the insured and not automatically in every small change. As he said, otherwise administrative costs will be created for insurance companies even for small increases, while some insured may not want a relevant report.
Nicosia MP Irene Charalambidou argued that the elderly have been overburdened by high premiums and pressures from insurance companies, while in a country without adequate public transport, the refusal of insurance leads to social isolation. He said that there are cases of elderly people who pay 700-800 euros in insurance premiums without having caused an accident and noted that abroad those who are not involved in accidents are rewarded. He stated that he will vote against the DISY amendment, because it is not easy for an elderly person to know when to ask for an explanation, and congratulated the rapporteur of the proposal and the Human Rights Committee.
The President of the Ecologists, Stavros Papadouris, stated that he will support the law proposal, stressing that it is the obligation of the legislative power to ensure the right of the elderly to know clearly the cost of insurance. He submitted an oral amendment so that the obligation of insurance companies to provide a written justification to remain, but not to be sent if the applicant declares that he does not need it, thus seeking a middle ground with the DISY proposal.
DIKO MP Zacharias Koulias said that in Cyprus there have always been elderly drivers and that, based on the low compensation claims that arise from them, insurance premiums should be reduced instead of increased. He argued that the situation arose due to "the unaccountability of the banking system", as many insurance companies are linked to banks, and noted that the State should have taken measures earlier.
Fotini Tsiridou, a DISY MP, stressed that people who have worked a lifetime and paid taxes and insurance premiums face refusal of insurance or exorbitant charges when they exceed an age limit. He stated that he supports the legislative initiative because it introduces transparency and obliges companies to document their decisions. He expressed support for DISY's amendment to avoid a possible increase in premiums due to administrative costs and suggested that the State consider subsidizing premiums for low-income pensioners.
Christos Senekkis, DIKO MP, referred to the constitutional dimension of the proposal, noting that it is a classic conflict between the freedom of contract and the prohibition of discrimination. He said that insurance companies are the economically strongest side and that the right to free contract must protect citizens from economic exploitation. He congratulated the rapporteur on the initiative.
Efthymios Diplaros, DISY MP, said that the Parliament is taking a substantial step towards more justice and transparency in car insurance, putting an end to arbitrariness when insurance companies refuse to insure the elderly. He noted that the companies did not show the necessary sensitivity and that the legislation sends a clear message for more equality before the law and respect for the elderly.
Alekos Tryfonidis, MP of DIPA, stated that the interventions and appeals of the Parliament to the insurance companies did not work, which is why the legislative regulation was deemed necessary. He stressed that drivers over 70 are involved in a low percentage of accidents and spoke of age discrimination and violation of fundamental rights. He stated that the proposal promotes equal access to insurance and strengthens the accountability of companies, while calling on insurance companies not to pass on the cost to the rest of the insured.
Ilias Myrianthous, MP of EDEK, welcomed the rapporteur's initiative, stressing that when businesses abuse their dominant position, the State must set clear rules in the market. He stressed that the need for regulation is even greater in a country with limited public transport, especially in remote areas. He noted that it is arbitrary to increase premiums only because of age when the driver is not considered high-risk, and expressed concern about discussions at EU level about possible restrictions on driving licences for older ages.
Chrysis Pantelidis, DIKO MP, congratulated Alexandra Attalidou on the initiative, noting that DIKO supports her because it ensures fairer treatment of citizens and strengthens the collection of data on traffic accidents. He said that better data recording will help the State to have a clearer picture of the problem and called on insurance companies to contribute with data and conclusions that will help reduce traffic accidents. He also stressed that the elderly are among the most cautious drivers.
Panikos Leonidou, DIKO MP, argued that the proposed law introduces for the first time in Cyprus an important principle of law that applies in Europe, the principle of the tertiary effect of individual rights. As he explained, this extends the protection of rights to regulate not only state-citizen relations, but also relations between individuals.
Andreas Kafkalias, AKEL MP, presented data from a survey requested by the European Centre for Parliamentary Research and Documentation, according to which in most EU countries age is not a discriminatory factor for driver insurance. He mentioned that insurance companies primarily rely on other criteria, such as accident history, engine power, and insurance history. He noted that the elderly often record the fewest traffic offenses and pay lower insurance premiums in other countries, unlike Cyprus, accusing the Government of being absent from the effort to regulate the issue.
Aristos Damianou, an AKEL MP, spoke of a "paradox", arguing that there is no real freedom of contract when pensioners are forced to pay exorbitant amounts to be insured. He stressed that the law responds to rules of natural justice, as age cannot be a criterion for exclusion without documentation. He argued that in an oligopoly such as that of insurance companies, the refusal must be justified, while noting that pensioners are under pressure, since they are obliged to be insured despite their low incomes. He also expressed the hope that there will be no mention of the law by the President of the Republic.
The individual socialist MP Kostis Efstathiou said that certain services in life should be provided to everyone without exception. He likened vehicle insurance to basic services such as electricity or telecommunications, noting that just as one cannot refuse to provide electricity to a home, so insurance companies should not exclude people from insurance due to age. He described the proposal as a necessary regulation that was missing from Cyprus.
Pavlos Mylonas, DIKO MP, referred to a statement by Alexandra Attalidou that the Parliament is called upon to stand against big interests and commented that the debate on the law proposal is proof of this attitude.
DISY MP Rita Superman said that the issue is part of the framework of protection from discrimination and noted that DISY had raised the issue with the Ministry of Finance asking for a premium subsidy or other support measures, without a positive response. He added that interventions were also made to the insurance companies to change the age limits, also to no avail. He stressed that DISY supports the adoption of the proposal, but considers that the documented justification should be provided at the request of the insured, so that the administrative cost does not increase and is passed on to the insured.
CNA
