The end of discriminatory practices in the access to bank insurance and credits

On 22 October 2021, the approval of draft Law no. 691/XIV/2nd, which provides for the end of discriminatory practices in access to insurance and bank loans by cancer, HIV or diabetes patients, also known as the “Right to Forget Law”, took place.

In this context, and taking into consideration the final wording dated 3 November, we have prepared this informative note, with brief indications about the scope and measures of the diploma under analysis.

1. Legislative Context
Considering the need to re-evaluate the situation of people cured of certain pathologies or suffering from controlled illnesses such as cancer, diabetes, HIV/AIDS or Hepatitis C, who have been facing several obstacles when applying for personal credit or subscribing to life insurance, draft Law no. 691/XIV/2nd was presented and approved in generality and in speciality regarding this topic. In this sense, and after the final overall vote of the law, it is now to be published in Diário da República (official gazette of Portugal) and will come into force on 1 January 2022.

2. Object and scope of application
The present Law institutes in Portugal the “Right to Forget” for people who have overcome situations of aggravated health risk in the access to credit and insurance contracts.

2.1 Amendment and Addition to Decree-Law No. 72/2008, of 16th April

The present diploma proceeds with the revision of articles 15 and 217 of the Legal Regime of the Insurance Contract, approved by Decree-Law no. 72/2008, of April 16, in its current wording, as well as the addition of articles 15-A and 15-B to the same diploma.

In this regard, actions or omissions, wilful or negligent, that violate the principle of equality, implying for people in that situation a less favourable treatment than that given to another person in a comparable situation, will now be considered discriminatory practices, on the grounds of disability or aggravated health risk, referring directly to the terms of Law no. 46/2006, of 28 August.

It should be noted that express provision is made for supervision by the Insurance and Pension Funds Authority as to practices and techniques of assessment, selection and acceptance of risks proper to the insurer, for the purposes of conclusion, execution and termination of the insurance contract.

It also makes it mandatory for the insurer to provide information on the ratio between specific risk factors and the risk factors of a person in a comparable situation but not affected by that disability or aggravated health risk, to the applicant who has been refused an insurance contract or has had the respective premium increased due to disability or aggravated health risk.

They also propose the addition to Decree-Law 72/2008, of April 16th, of articles 15-A and 15-B, regarding the access to insurance credits, in which the State will enter into and maintain a national agreement regarding access to credit and insurance contracts by people who have overcome situations of aggravated health risk or disability, between it and the sector associations representing credit institutions, financial companies, mutual companies, welfare institutions and insurance and reinsurance companies, as well as national organisations representing people with aggravated health risk, people with disabilities and users of the health system.

It also lists the beneficiaries of the measure described above, as well as the entities to which the agreement applies. Of particular importance is the possibility of agreeing on a pooling mechanism for the additional costs arising from contracting insurance or credit with people who have overcome situations of aggravated health risk or disability, which will be exclusively financed by the private institutions that have joined.

The Bank of Portugal, for credit contracts, and the Insurance and Pension Funds Authority, for insurance contracts, will be responsible for supervising compliance with this agreement.

We note that these measures also apply to people who, despite having overcome situations of aggravated risk and who have demonstrably ceased the active treatment phase, are still undergoing treatment.

2.2 Amendment to Law 46/2006 of 28th August

It is proposed, therefore, the amendment of articles 3 and 9 of Law no. No. 46/2006 of 28 August, regarding the definition of “person with aggravated health risk” as “a person suffering from any and all pathologies which determine a long-lasting, evolving, potentially incapacitating, organic or functional alteration that alters the bearer’s quality of life on a physical, mental, emotional, social and economic level and is a potential cause of early invalidity or a significant reduction in life expectancy”, as well as the consequences applicable to the violation of the agreement implementing the provisions of article 15-A of Decree-Law No. 72/2008, referred to above.

CONCLUSIONS
The “Right to Forget”, due to its social importance, has been developed in a European context, focusing on the evident and necessary protection of people with aggravated health risks who wish to access credit and/or insurance products.

It is therefore important to underline the importance of the adoption of this diploma in Portugal and the positive consequences of the implementation of these measures, in patients with overcome cancers or other chronic diseases that, even if not yet overcome, are under control, who until now could see their access to contracting life insurance and credit hampered.