Complainant

Respondent

Parties

Hugh  McGuire

Core Credit Union

Representatives

  Self-Represented

Michael Byrne, CEO

Greg Allen, Risk and Legal

Alan Guerins, Chair of the board

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000

CA-00047679-001

13/12/2021

This complaint concerns a complaint by the Complainant in which he alleges that he was discriminated against, contrary to the Equal Status Act 2000, by Core Credit Union in the provision of goods and services in relation to a measure the Respondent introduced to its Life Insurance members’ benefit scheme which existed between 01 December 2020 to 01 April 2022.

The Respondent disputes that the scheme during its lifetime was discriminatory on the grounds of age. The Respondent also submits that the scheme is not unlawful as it falls within an exemption provided under section 5(2)(d) of the Equal Status Acts, where the difference in the treatment of persons is not deemed to be discriminatory if "it is effected by reference to actuarial or statistical data obtained from a source on which it is reasonable to rely, or other relevant underwriting or commercial factors, and is reasonable having regard to the data or other relevant factors."

There was a substantial amount of documentation submitted by the Complainant. It is not practical to outline these in detail and I have highlighted the key points below.

On the 13 December 2021, the Complainant submitted his complaint to the Workplace Relations Commission under the Equal Status Act 2000, on the grounds of Age in relation to Core Credit Union free Life Insurances members’ benefit.

The Complainant submitted at the hearing that the Core Credit Union free Life Insurances members’ benefit provides a lump sum payment to a bereaved members’ account, upon the members death (Life Savings Benefit).

The Complainant further submits that Core Credit Union free Life Insurances members’ benefit was an ongoing form of discrimination on the grounds of Age in that the scheme provided members with a set of life indemnities which provide their remaining family member with a cash benefit to support bereavement expenses.

The Complaint further submitted on this point that the benefit levels were based on whether the member engaged in Credit Union services actively, or not, and the level of indemnity offered was commensurate with the members’ actual savings and age.

The Complaint told the hearing that the younger the member, the higher the benefits offered.

The Complainant further told the hearing that the Life benefits Insurance are split between different member’s plans – Standard Plan and Active Plan with active members being rewarded with a higher level of Insurance cover.

The Complainant stated that as a Standard member over the age of 65, he was treated unfairly in comparison to other lower age cohorts on the Standard Plan and also the Active Plan as the younger the member, the higher the benefits offered.

In response to the actuarial data and post hearing submission provided by the Respondent on the 02 December 2022, the Complainant submitted that based on his interpretation of the letter and data provided, Core Credit Union have imposed life benefit insurance which differs from the points set out in the data they were relying on from Cuna Mutual Group Services Ireland Limited.

The Complainant further submitted that as a single rate is applied by Cuna Mutual Group Services (Ireland) Limited in respect of life benefit insurances, Core Credit Union and not Cuna Mutual Group Services (Ireland) Limited have introduced the requirements for standard, active members on an age of death basis.

The Complainant further added that the member plans did not form part of Cuna Mutual Group Services (Ireland) Limited calculations in determining insurance rates which have been applied by Core Credit Union/

In closing, the Complainant submitted that this amounted to unfair treatment on the grounds of Age and that he was discriminated against, contrary to the Equal Status Act 2000, by Core Credit Union in the provision of goods and services in relation to a measure the Respondent introduced to its Life Insurance members’ benefit scheme which existed between 01 December 2020 to 01 April 2022.

The Respondent disputes the claim and submitted a written submission on the date of the hearing which the Respondents referred to while providing an overview and timeline of the actions relating to the complaint.

By way of background information, the Respondent submitted that Core Credit Union is a member owned and governed financial services organisation and it is and remains the purest form of a democratic financial organisation in the State.

The Respondent also submitted that the case which was submitted to the WRC is in relation to its free Life Insurances members’ benefit which is a free service offered by Core Credit Union which provides a lump sum payment to a bereaved members’ account, upon the members death (Life Savings Benefit),

The Respondent further submitted that the life benefits programme was not discriminatory and that it had a fair, reasonable, and justifiable basis for differentiating its free benefits across its membership, in a fair, open and transparent manner, through programmes which were consistent with its purpose as a Credit Union of promoting a legitimate objective of having a life benefits programme covering all members regardless of age.

The Respondent also added that Core Credit Unions’ new benefits programme did not have a terminal age and was unique within the country insofar as it continued to support members up to age of bereavement, with no upper age limit, and this was done so without any direct charge to the member.

The Respondent advised the hearing that as of the 01 April 2022, Core Credit Union had to make the difficult decision to discontinue its Life Insurance policy with Cuna Mutual to all members.

During the life insurance policy lifetime Core Credit Union set out a programme of free benefits for its members between 01 December 2020 and 01 April 2022, with the legitimate member aim of providing members with a set of life indemnities which provide their remaining family with a cash benefit to support bereavement expenses.

The design and provision of its member benefits programme were consistent with the requirements of the Equal Status Acts;

The Respondent submitted that Core Credit Union offered such benefits by using expert insurance industry partners to develop, to risk rate and to provide group indemnity polices for such a consolidated member life indemnification programme to the needs of the Credit Union, through a Credit Union level policy, whist utilising contemporaneous risk rated data to cost such a programme.

The Respondent advised the hearing that this included but is not limited to statistical and actuarial data on the Credit Union membership, the relative claims experience based on age and the respective level of benefits projected for each member demographic cohort within the programme.

The Respondent further advised the hearing that Core Credit Union’s LBI programmes was both inclusive, proportionate, and appropriate based on all legitimate factors considered by the Credit Union.

In addition, the Respondent submits that the purpose of the LBI scheme was to provide a member’s family with some level of end-of-life expenses, with benefit levels determined based on the level of savings the member had with the Credit Union, and their relative age at time of bereavement.

In this regard, the Respondent further submits that the benefit levels reduce relative to the member’s age and the risk cost for the Credit Union in providing this benefit. Younger members, with whom we encourage thrift, a core purpose of the Credit Union and the basis of our business model, who also have lower savings have higher benefit levels reflective of needs at their stage in life.

The Respondent further submitted that Member benefit levels were based on whether the member engaged in Credit Union services actively, or not, and the level of indemnity offered was commensurate with the members’ actual savings and age banded.

The younger the member, the higher the benefits offered. The purpose of this structure was to support the relative ‘need’ to member households based on life stage, and that whilst balancing the relative increased costs of cover related to member risk factors, such as age and savings levels, as determined based on contemporaneous risk and actuarial data. In doing so, Core Credit Union was setting out to provide a proportionate inclusive and fair programme for all members, which reflected its core purpose of supporting thrift and providing support for its members and community.

The Respondent advised the hearing that the Complainant joined Core Credit Union at the age of 68 and as stated was aware of the free benefit life insurance that Core Credit Union offered.

As highlighted in the Complainants submission, he was aware of the return on his deposits should he have passed away.

In addition, the Respondent submitted that as the Complainant did not fall under the ‘active’ category of the revised insurance scheme, his benefit related to the Standard plan benefits rather than the benefits that an Active member could avail of.

The Respondent submits in this regard that the Adjudicator should acknowledge that the differential treatment of customers/members by financial service providers was both lawful and legitimate when based on contemporaneous, reliable and substantiated risk factors directly related to such services.

Specifically, on this point the Respondent advised the hearing that, section 5(2)(d) of the Equal Status Acts allows for difference in the treatment of persons, in relation to insurance services/policies or any other matters relating to the assessment of risk.

It is in this context the Respondent advised the hearing that the Credit Union refutes that the Life Benefit Indemnity (LBI) was discriminatory in that It had a fair, reasonable, and justifiable basis for differentiating its free benefits across its membership, in a fair, open and transparent manner, through programmes which were consistent with its purpose as a Credit Union of promoting thrift, and its legitimate objective of having a life benefits programme covering all members regardless of age.

In establishing a basis for its member benefit programme, the Respondent submitted as followed;

a. Core Credit Union have a legitimate legal purpose of promoting thrift to its members, which is enshrined in legislation;

b. The affordability of maintaining and funding its benefits programme relied upon the legitimate use of its membership risk data, and demographic and actuarial analyses which was reliable, substantive and quantitative;

c. It balanced the purpose and proportionality of the programme’s design to encourage younger members to save, whilst affording an inclusive benefits programme to members of all ages, with no upper age limit. Benefits are differentiated based on the relative risk costs of providing such a benefit offers.

In this regard, the Respondent submitted a post hearing submission dated 02 December 2022 regarding CUNA Mutual Group Services (Ireland) Ltd outlining the approach and data used by their underwriters Data extract for actuarial review of Core Credit Union.

The Respondent submitted that CUNA Mutual Group Services (Ireland) Ltd received data extracts from Core Credit Union which were relied upon for the demographic and risk analysis underpinning the calculations in determining insurance rates for the Credit Union’s group life policies:

1. Group Loan Protection Policy (effective December 2020)

2. Group Life Benefit Insurance Policy (effective December 2020)

3. Group member Death Benefit Indemnity program (effective January 1st, 2021)

In closing the Respondent disputes that the scheme during its lifetime was discriminatory on the grounds of age. The Respondent also submits that the scheme is not unlawful as it falls within an exemption where the difference in the treatment of persons is not deemed to be discriminatory if "it is effected by reference to actuarial or statistical data obtained from a source on which it is reasonable to rely, or other relevant underwriting or commercial factors, and is reasonable having regard to the data or other relevant factors."

I have considered this matter very carefully and I have taken into account all relevant submissions presented to me by the parties. Both parties provided written submissions and presented these at the hearing of the complaint.

In summary, this complaint concerns a complaint by the Complainant in which he alleges that he was discriminated against, contrary to the Equal Status Act 2000, by Core Credit Union in the provision of goods and services in relation to a measure the Respondent introduced to its Life Insurances members’ benefit scheme which existed between 01 December 2020 to 01 April 2022.

The Respondent disputes that the scheme during its lifetime was discriminatory on the grounds of age. The Respondent also submits that the scheme is not unlawful as it falls within an exemption provided under Section 21 (11) of the Equal Status Act, where the difference in the treatment of persons is not deemed to be discriminatory if "it is effected by reference to actuarial or statistical data obtained from a source on which it is reasonable to rely, or other relevant underwriting or commercial factors, and is reasonable having regard to the data or other relevant factors."

Section 38A of the Equal Status Act, 2000, states:

38A.—(1) Where in any proceedings facts are established by or on behalf of a person from which it may be presumed that prohibited conduct has occurred in relation to him or her, it is for the respondent to prove the contrary.

First, I must assess whether the Complainant has succeeded in establishing a prima facie case. In order to do so the Complainant must satisfy three criteria in relation to his complaint. He must (1) establish he is covered by a discriminatory ground (in this case age ground); (2) it must be established that the specific treatment alleged by the Complainant actually occurred and (3) there must be evidence that the treatment received by the Complainant was less favourable than the treatment someone who was not covered by the discriminatory ground would have received in similar circumstances.

So, has the Complainant established facts from which it may be “presumed” that there has been direct or indirect discrimination?

I find he has.  The Complainant is over 65 years old, and it is clear and not contested that the Respondent imposes a limitation in relation to the Life Insurances members’ benefit based purely on age. It is clear he was treated less favourably than a comparator within the age range of 30 to 65 years of age.  This being the case it is for the Respondent to prove that their limitation is not in breach of the Act.

The Respondent points to exemptions of section 5(2)(d) of the Equal Status Acts, which allows for differences in the treatment of persons in relation to annuities, pensions, insurance policies or any other matters related to the assessment of risk where the treatment—

(i) is effected by reference to—

(I) actuarial or statistical data obtained from a source on which it is reasonable to rely, or

(II) other relevant underwriting or commercial factors,

and

(ii) is reasonable having regard to the data or other relevant factors,

In this regard, Section 5 in full of the Act states:

(1) A person shall not discriminate in disposing of goods to the public generally or a section of the public or in providing a service, whether the disposal or provision is for consideration or otherwise and whether the service provided can be availed of only by a section of the public.

(2) Subject to subsections (4) and (4A), subsection (1) shall not apply in respect of—

(a) an activity referred to in section 7(2),

(b) a service related to a matter provided for under section 6, or a service offered to its members by a club in respect of which section 8 applies,

(c) differences in the treatment of persons on the gender ground in relation to services of an aesthetic, cosmetic or similar nature, where the services require physical contact between the service provider and the recipient,

Section 5(2)(d) of the Act also provides that the general prohibition on discrimination does not apply to differences in the treatment of persons, in relation to, inter alia, “insurance policies or any other matters related to the assessment of risk” where the treatment is effected by reference to reasonably reliable actuarial or statistical data or other relevant underwriting and commercial factors and where it is reasonable having regard to those data and factors. 

In order to avail of the exemption a respondent must show that a difference in treatment is

(1)    effected by reference to actuarial or statistical data which was obtained from a source on which it was reasonable to rely and is reasonable having regard to the data or other relevant factors or 

(2)    is effected by reference to other relevant underwriting or commercial factors and it is reasonable having regard to the data or relevant factors.

Therefore, I have to assess (1) whether the method employed by the Respondent provides actuarial or statistical data upon which it is reasonable to rely in setting the differential treatment in the scheme based on age in this case (2) and/or whether the method employed by the Respondent or whether there are other relevant underwriting or commercial factors upon which it is reasonable to rely having regard to the to the data or relevant factors.

In relation to (I) and (2) above, I have given careful consideration to the information that was submitted by the Respondent. 

In deliberating on the evidence before me, I have no reason to doubt that Respondent acted in an entirely professional manner and also in good faith in conducting his reviews and that every effort was made, on each occasion, to ensure the integrity of the statistics used.

I am, therefore, satisfied that Respondents findings complied with the first part of test (1) in that they were "effected by reference to actuarial or statistical data".

This then raises the question as to whether the actuarial or statistical data used came from "a source on which it is reasonable to rely".

In this regard, based on the follow up post hearing submission of the Respondent, I am not satisfied that it is reasonable to rely on in that the data sets do not appear to demonstrate or refer to any data which justifies differential treatment on the grounds of age.

On the basis of this information, I find that there is insufficient evidence before me to convince me that the actuarial or statistical data, which guided the Respondent's Life insurance Policy "was obtained from a source on which it is reasonable to rely" or that their decision was "reasonable having regard to the data or other relevant factors". Accordingly, I consider that the Respondents have not fully satisfied the test at (1) above.

With regard to the test at (2) above, the Respondents have identified a number of underwriting and commercial factors which influenced their decision in that older members are disproportionately more likely to die than its younger members.

In this regard, Section 5(2)(d) states, however, that where the treatment is affected by reference to other relevant underwriting or commercial factors that it must also be "reasonable having regard to the data or other relevant factors".

In my opinion, there are many other considerations, apart from those identified above, that should be taken into account. These considerations include, among others, the person's health. These to me are "other relevant factors" that should be taken into account in making such decisions. Instead, the Respondent applies an "across the board" policy of differential treatment based on age, with no regard for a person's particular circumstances. For these reasons, I find that I cannot accept that the Respondents policy "is reasonable having regard to ... other relevant factors".

Accordingly, I find that the Respondent have also failed to satisfy the test at (2) above and I have concluded that the differential treatment does not fall within the exemption provided for under Section 5(2)(d) of the Equal Status Act 2000.

While clearly there is substance in the Respondent's claim that there is a direct corelation between age and mortality, it is important to note that the Respondent did not produce at the hearing or in its follow up submission any data set which I am satisfied has quantified this claim.

I, therefore, find that there is insufficient evidence before me to support the defence of the Respondent. In this regard, I find that a prima facie case of discrimination on the age ground has been established by the Complainant, resulting in the burden of proof shifting to the Respondent.

I find also that the Respondent has failed to rebut the allegation.

I further find that the Respondent, in not being able to produce full details of the actuarial or statistical data that had guided their policy, have failed to satisfy me that the data came "from a source on which it was reasonable to rely".

I also further find that that the Respondents policy was not reasonable having regard to the data or other relevant factors as it did not take all relevant factors into account in considering individual requests but simply applied an across the board policy of differential treatment based on age.

Accordingly, I find that the Respondent is not covered by the exemption provided for under Section 5(2)(d) of the Act.

I also find that the Complainant has established a prima facie case of discrimination on the grounds of his age contrary to Sections 3(1), 3(2)(f) and 5(1) of the Equal Status Act, 2000 in relation to the treatment he received. I also find that the Respondent have failed to rebut the allegation.

In considering the level of redress that is most appropriate, I am mindful of the following that the Respondent does not completely discriminate against people of higher age groups as its policy during its existence continued to include members regardless of age.

Taking this into account and also finding that discrimination has occurred in this instance, I order that the Respondent pay the Complainant the sum of €1000.

Having investigated the above complaint, I hereby make the following decision in accordance with Section 25 of the Equal Status Acts.

I find that the complainant has established a prima facie case of discrimination on the grounds of his age contrary to Sections 3(1), 3(2)(f) and 5(1) of the Equal Status Act, 2000 in relation to the treatment he received. I also find that the respondent has failed to rebut the allegation.

In considering the level of redress that is most appropriate, I order that the Respondent pay the Complainant the sum of €1000.

Age discrimination.