Is the requirement reasonable in the circumstances? This will not constitute indirect discrimination if the current pricing is considered reasonable in the circumstances. Even if an alternative approach was possible, the key question is still reasonableness, not whether CIPL could have made a better or more informed decision.74 In determining reasonableness, the impact of the discriminatory effect would need to be weighed against the reasons for the requirement. Relevant factors include: • the difference in the riskiness of Group A and Group B • the relative expected cost of claims from Group A and Group B • the difficulties in implementing alternative pricing based on the riskiness of Group A and B, such as collecting information regarding group membership from customers, and whether the alternative policy would be discriminatory • the relative difference between the current premiums and premiums under the alternative pricing. CIPL charges premiums based on group membership If CIPL instead charged premiums in accordance with a person’s membership in Group A or Group B, such that people in Group A were charged lower premiums than people in Group B who drove similar cars, then this might constitute direct discrimination against Group B. If the membership of Group B related to age, disability or sex, and CIPL based these premiums on actuarial or statistical data on which it was reasonable to rely which confirmed the increased risk of this group, they would likely be able to rely on the data exemption under the ADA, DDA, or SDA, provided any discrimination against Group B was considered reasonable having regard to the data and other relevant factors. If the membership of Group B related to race, colour, descent, national or ethnic origin, there is no data exemption. As such, CIPL may be in engaging in direct discrimination in breach of the RDA by charging different premiums on this basis. Group A might argue more generally that they are being treated unfairly, but that is a broader claim than unlawful discrimination. While that is outside the scope of this Guidance Resource, such complaints may still be relevant considerations for an insurer. Guidance Resource: Artificial intelligence and discrimination in insurance pricing and underwriting • 2022 • 31