Providing a policy with such conditions may constitute direct discrimination against people over 60. TIPL would need to rely on the data exemption under the ADA to ensure it was lawful. As this discrimination is based upon actuarial or statistical data indicating that health risks increase with age, the key question is whether the age cut-off is reasonable having regard to the matter of the data and other relevant factors. Summary • Relevant factors would include the nature and purpose of the product, medical opinions, the customer’s circumstances, other professional opinions, actuarial advice or opinions, practice of others in the insurance industry, commercial judgement, and the relative number of customers under and over 60. Further, TIPL may also consider the impact of increasing the age cut-off on the premium and the effect on younger customers. If the increase in the required cross-subsidised premium was so significant as to make this product unattractive and uncompetitive compared to an age-rated product, then this may help to justify the threshold selected. For example, if the increase in the required premium was only 5% to increase the age limit to 65, this may be more acceptable (and hence should be more actively considered by TIPL) than an increase in the required premium of 50% to increase the limit to 75. As the customer’s circumstances may be a relevant factor, imposing conditions on the insurance may be seen as less reasonable for customers over 60 who are in excellent health. However, on balance, it may still be considered reasonable to impose such conditions given the circumstances in which the product is being sold, particularly if there are alternative products available in the marketplace which may be able to meet the needs of the older individuals. Where data is limited, some approaches to price setting may be more discriminatory, and at greater risk of constituting unlawful discrimination. Insurers should consider the potential options available to them, and whether a more discriminatory option is justified, if less discriminatory options are available. • If including a cut-off based on a customer’s age, the level of age threshold is again a matter of judgement for the insurer. Similar considerations may apply to other protected attributes in other situations. An insurer should carefully consider all relevant factors, including the availability and impact of a less discriminatory option on the whole population, in order to justify the threshold selected. 5.3 Case Study: Life Insurance When data is added to a model, it frequently affects the fitted estimates of effects from other factors in that model. This may include protected factors an insurer is intending to rely on under an insurance exemption. This case examines this issue, and any resulting obligations on insurers to use (or not use) any available data. Guidance Resource: Artificial intelligence and discrimination in insurance pricing and underwriting • 2022 • 35