The ASF (Insurance and Pension Funds Supervisory Authority) issued, on December 17, 2024, Regulatory Standard No. 12/2024-R. This standard, in addition to regulating the operationalization of the duty not to collect or process health information by insurers, under the Right to Forget Law, also detailed the meaning and extent of the discriminatory practices provided for in article 15 of the Insurance Contract Law, as well as the risk factors to be considered.
Thus, the said Standard establishes that the insurance company cannot propose contractual conditions based on the disability or aggravated risk of physical and mental or psychic health of the insured that are less favourable than those that would be proposed for a person in a comparable situation (considering that there is a comparable situation when the risk factors of an insured person with a disability or aggravated risk of physical and mental or psychic health are equivalent to the risk factors of another insured person).
It is established in this Regulatory Standard that discriminatory practices are considered to exist when, due to disability or aggravated risk of physical and mental or psychic health of the insured, compared to the conditions that would be proposed for a person in a comparable situation, there is a refusal to contract, an increase in the premium amount, the provision of exclusions or deductibles.
Notwithstanding the above, this Standard allows the presentation of different conditions due to disability or aggravated health risk, whenever, for the insurance contract in question, it constitutes a crucial factor in the calculation of the risk cost. The ASF does not define the concept of «crucial factor,» so it must be applied on a case-by-case basis, considering the insurance contract in question, thus ensuring a greater margin of flexibility, considering the diversity of potential situations in which this factor can be applied. Indeed, this provision aims to set a high degree of requirement regarding the impact of disability or aggravated health risk. Thus, the mere verification of a situation of aggravated health risk or disability is not sufficient to influence the insurance proposal. It will be necessary for this risk to be sufficiently relevant, from a technical-actuarial point of view, for conditions to be presented that reflect its existence, namely, a higher insurance premium.
On the other hand, the consideration of the insured’s disability or aggravated health risk as a factor in the calculation of the risk cost must be expressed through the ratio between the specific risk factors and the risk factors of a person in a comparable situation, but not affected by that disability or aggravated health risk, concerning the product in question or, when appropriate, the insurance branch in which it is integrated, obtained based on actuarial and statistical data.
Regulatory Standard No. 12/2024-R, of December 17, also provides that, if the conditions proposed by the insurance company, namely the premium amount, result from disability or aggravated health risk, the insurance company must inform the policyholder of the conditions that would be proposed if that disability or aggravated health risk did not exist. This information must be provided in writing and drafted in a clear and understandable manner, using, whenever possible, common language, before the policyholder commits.
It should also be noted that insurance companies must prepare an annual report on discriminatory practices (which will, in principle, be the same report provided for the right to forget), to be sent by April 15 through the ASF Portal, according to the form and reporting map to be made available on the ASF website.
The team of lawyers from the of – Branch in Portugal has a team of lawyers with extensive experience in analysing potential situations that may constitute discriminatory practices, which can be a relevant aid, both for insurance companies and individuals.
