The use of sex as a rating variable in the South African non-indemnity insurance industry

Abstract

This mini-dissertation aims to explore whether the use of sex as a rating variable in South African non-indemnity insurance is constitutionally fair or not. It discusses the nature of insurance, the two types of insurance contracts, and how risk, insurable interest, and premiums are calculated using rating variables. The argument presented suggests that there may be unfair discrimination when insurers use sex as a rating variable to determine premiums, and that a South African court should examine whether sex-based premiums constitute discrimination, as well as whether sex-based rating variables can be deemed constitutionally justifiable rather than merelyactuarially justifiable. By outlining the application of the Constitution and the Equality Act to promote equality and prohibit unfair discrimination, this mini-dissertation explores how the issue of using sex as a rating variable can be addressed in a South African court. It also provides a comparative analysis of foreign jurisdictions, including the U.S., Canada, and the European Union, to identify guiding principles that could help inform the South African adjudication process on whether sex-based discrimination in insurance premiums is fair or unfair. Finally, this dissertation suggests recommendations that a South African court and the South African legislators can consider in promoting equality and prohibiting unfair discrimination in insurance practices.