Preventing insurance markets from separating into gender-dominated price-coverage combinations

This article first examines the extant literature on regulatory attempts- to prohibit gender-based risk categorization in insurance markets as adopted in a number of countries and proposed in New Zealand's Human Rights Bill 1992 (but not subsequently enacted). The literature suggests that regulators' aspirations and expected outcomes may not materialize. Stronger regulations that effectively impose unisex pricing requirements at either the level of the individual firm or the market level, and which attempt to prevent markets separating into price-coverage combinations dominated by one or other gender, are then evaluated. While these raise the likelihood that targeted gender groups or the majority of their members are made better off via access to pooling contracts, the desired results are still not guaranteed. A variety of outcomes are possible, including pooling contracts that make no insured person better off and separating contracts that make targeted groups better off. Outcomes are sensitive to various parameters and also to the concepts of equilibrium deemed appropriate to the problem.