5.—The following section is substituted for section 7 of the Principal Act:

“7.—(1) (a) Subject to subsection (4) and section 7A, the premium payable under any health insurance contract effected by a particular registered undertaking shall be the same as that payable under every other such contract (after due allowance has been made in respect of the payment of any premium by instalments) that—

(i) is effected by that undertaking,

(ii) is in respect of the same period as that to which the first-mentioned contract relates,

(iii) relates to the same health services as those to which the first-mentioned contract relates, and

(iv) provides for the same payments by the undertaking in respect of those services as those provided for by the first-mentioned contract.

(b) A registered undertaking shall not effect a health insurance contract that contravenes paragraph (a).

(c) A health insurance contract that complies with paragraph (a) (or which would comply with that paragraph but for its falling within subsection (4) or section 7A) shall be known as a community rated health insurance contract and ‘community rating’ shall be construed accordingly.

(2) Without prejudice to the generality of subsection (1), premiums payable under health insurance contracts shall not be varied by reference to—

(a) the age, sex or sexual orientation or the suffering or prospective suffering of a person from a chronic disease, illness or other medical condition or from a disease, illness or medical condition of a particular kind,

(b) the frequency of the provision of health services to a person, or

(c) the amounts of payments or the number of different payments to which a person becomes entitled under such a contract.

(3) The amounts of the payments provided by a health insurance contract in respect of the health services to which it relates shall not be varied by reference to the age, sex or sexual orientation of the person to whom those services are provided.

(4) Notwithstanding subsections (1) and (2), a premium payable under a health insurance contract effected by a registered undertaking—

(a) shall, in so far as it relates to a person under the age of 18 years, be—

(i) waived, or

(ii) reduced, such a premium being not more than 50 per cent of the premium in respect of a person other than the persons specified in this subsection under a health insurance contract effected by that undertaking,

and

(b) may be reduced in so far as it relates—

(i) to a person who is of or over the age of 18 years and under the age of 23 years, is receiving fulltime education and is dependent on the person with whom the contract is effected, such a premium being not more than 50 per cent of the premium in respect of a person other than the persons specified in this subsection under a health insurance contract effected by that undertaking,

(ii) to a person who is a member of a restricted membership undertaking and is in receipt of a pension recognised for the purposes of the undertaking, or

(iii) to a person who is a member, for the purposes of health insurance, of a group of persons, such a premium being, if it is reduced, not less than 90 per cent of the premium in respect of a person other than the persons specified in this subsection under a health insurance contract effected by that undertaking.”.