How the Gender Pay Gap Information Act 2021 is Relevant to (Re)Insurers
The Gender Pay Gap Information Act 2021 makes it mandatory for employers to report on the pay differences between male and female gender employees. Firms employing over 250 people must publish their first gender pay gap report in December 2022 based off a snapshot date chosen by them in June 2022. We explore how the Gender Pay Gap Information Act 2021 is relevant to (Re)insurers in light of the issues identified in the Central Bank's 2020 Thematic Assessment of Diversity and Inclusion in Insurance Firms.

 

The Gender Pay Gap Information Act 2021 (the Act) was signed into law on 13 July 2021.  "Gender pay gap" refers to the difference in the average hourly pay of men and women in a particular organisation. The Act is the legislative basis for gender pay gap (GPG) reporting in Ireland. The Act requires employers to report on their gender pay gap across various metrics. On 3 June 2022, the Government published the Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) Regulations 2022 (the Regulations).  The Regulations provide further detail on how GPG reporting under the Act will work in practice.  The Act and the Regulations are effective from 31 May 2022.

See William Fry's employment team's article on requirements set out in the Regulations available here

The Act and the Regulations apply to Irish incorporated (re)insurers depending on their headcount, both in terms of the mandatory reporting requirements and the consequences for failure to report. Every firm employing more than 250 people must publish its first GPG report in December 2022. The Act does not apply to an Irish (re)insurer with less than 50 employees. This reporting requirement is likely to be an important step for in scope firms towards addressing the gender pay imbalance identified in the Central Bank of Ireland's 2020 report on the results of a Thematic Assessment of Diversity and Inclusion in Insurance Firms (Report). 

The Central Bank's Diversity and Inclusion Report

Readers will be aware that the Central Bank of Ireland (CBI) has placed an increased focus on diversity and inclusion (D&I), both externally in its role as a regulator and in its own organisation in recent years. On 29 July 2020, the CBI published the Report.  The CBI assessed a sample of some of the largest (re)insurers in Ireland; 11 (re)insurers were in scope of the assessment. The Report examined each firm's approach to D&I. The assessment included:

  • an examination of remuneration by gender;
  • the firm's monitoring, policies, and procedures of D&I; and
  • an examination of pre-approved control functions applications between 2012 and 2018.

The Report found that there was a lack of diversity at senior level in (re)insurers in Ireland and that this filtered down throughout various levels of seniority in firms. The assessment looked at multiple areas of diversity in which firms were lacking. Gender was identified as being a measurable problem area. 

The Report detailed the importance of D&I in firms in mitigating the risks associated with conformity and group-think, promoting more effective decision making, and helping foster a more inclusive environment and culture.

(Re)insurance Context: June to December 2022 Required Action 

2022 is the first year in-scope (re)insurers will be required to report on their GPG. The reporting obligations under the Act offer in-scope firms a framework with which to address the gender imbalance issues identified in the CBI's Report. The requirement to make a GPG report is to be implemented on a phased basis. Only (re)insurers with more than 250 employees are required to make a GPG report from 2022 to 2024. In 2024, the reporting obligations will extend to include (re)insurers with more than 150 employees and then will be extended to include (re)insurers with 50 or more employees from 2025. 

Organisations must choose a 'snapshot' date in June 2022, which becomes the "relevant date" for the purposes of the Regulations.  The GPG report must be based on all the employees employed on this date, including those on leave and employees not rostered to work on that date. The organisations will then have six months to prepare their calculations before reporting in December 2022. 

The GPG report shall include details on the following:

  • The difference between the mean and median bonus remuneration of female and male gender employees.
  • The difference between the mean and median hourly remuneration of female and male gender  employees.
  • The percentage of female gender and the percentage of male gender employees who were paid bonuses.
  • The difference between the mean and median hourly remuneration of female gender part-time employees and male gender part-time employees.
  • The percentage of female gender employees who received benefits in kind and the percentage of male gender employees who received benefits in kind.
  • The percentage of female and male gender employees falling within the lower pay band, the lower-middle pay band, the upper-middle, and the upper remuneration quartile pay band; and
  • The difference between the mean and the median hourly remuneration of female gender employees and male gender employees.

In their GPG report, employers must state their opinion on the reasons for any differences arising and what measures (if any) they are taking or will take to reduce or eliminate those differences entirely.  Importantly, organisations must then publish their gender pay gap information on their website or in any other way provided it is accessible to the public and its employees.

What steps should Irish (Re)insurers be taking now?

Irish (re)insurers employing more than 250 people should begin to calculate their gender pay gap immediately to ensure they are able to comply with the reporting requirements under the Act.  They should consider what measures they currently have in place and any measures that they intend to take in the future to reduce their GPG, if any. 
All firms, not just those in scope of the Act, should ensure that they have a robust strategy to tackle D&I in all its forms and not just in terms of gender imbalance. The CBI's Report emphasised the need for firms to understand the causes of the gaps so that they can then undertake clear actions to address those gaps. 

Contact Us

If you have any queries on the issues discussed in this article, please contact the Insurance team or your usual William Fry contact.

 

Key Contacts

Eoin Caulfield Partner

Ian Murray Partner

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