Abstract
Many private business relationships are increasingly characterized by claims that certain actions should not be permitted since particular right claims are involved. Such claims should be taken seriously, but are they always ethically legitimate? This paper analyzes one context, the use of age as a rating variable in the pricing of automobile insurance, where such claims are made. By identifying, evaluating and assessing the relevant basis for the differentiation, actuarial equity, it is concluded that there is an ethical basis for such a practice. The analysis also provides an equivalent means for considering other such analogous claims where actuarial equity is involved.
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We acknowledge the generous support of the Law Commission of Canada and the Insurance Bureau of Canada.
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Robert L. Brown is a Professor of Actuarial Science, Director of the Institute of Insurance and Pension Research at the University of Waterloo, Fellow and former President of the Canadian Institute of Actuaries, Fellow and past President of the Society of Actuaries. His research focus is the evolution of financial security programs in times of rapidly shifting demographics.
Darren Charters is an Assistant Professor in business law in the School of Accountancy, University of Waterloo. He is a member of the Law Society of Upper Canada and holds degrees in arts, law, and business. He has published in the areas of business ethics, competitive intelligence, privacy and employment law.
Sally Gunz is a professor in business law at the School of Accountancy, University of Waterloo, Canada. She is the Director of the Centre for Accounting Ethics, University of Waterloo and is a former president of the Academy of Legal Studies in Business. Her current research interests focus on the ethical decision making of professionals.
Neil Haddow is currently finishing his Ph.D in philosophy at the University of Waterloo. His Ph.D research focuses on reconciling value pluralism with rights theory.
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Brown, R.L., Charters, D., Gunz, S. et al. Colliding Interests – Age as an Automobile Insurance Rating Variable: Equitable Rate-Making or Unfair Discrimination?. J Bus Ethics 72, 103–114 (2007). https://doi.org/10.1007/s10551-006-9160-z
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DOI: https://doi.org/10.1007/s10551-006-9160-z