Abbey National is altering the terms of its insurance policies after a Belfast man took action against it under disability discrimination legislation.
The bank agreed to alter the terms of its policies and review its procedures as part of an out-of-court settlement of a case involving the provision of critical illness cover.
The Equality Commission of Northern Ireland, which supported the case, said the company had also paid the man involved £1,000 (€1,430) plus costs.
The case was brought under the Disability Discrimination Act, 1995, by Mr Thomas Hughes, who suffers from albinism and is registered blind, after he applied for a critical illness insurance policy.
The Equality Commission said the policy offered was limited to exclude all forms of cancer and any disease, disorder or injury to the eyes.
However, the company could not give any reason, either on an actuarial or medical basis, for the limitations on the policy.
In the settlement it apologised for any inconvenience caused as a result of what it called errors in underwriting the policy. It agreed to remove the blindness exclusion and reinstate cancer cover under the critical illness benefit.
Welcoming the settlement, Dame Joan Harbison, chief commissioner of the Equality Commission, said it was important that insurance companies made informed decisions when underwriting insurance policies for disabled people.
She said: "Insurance companies must ensure that they comply with the DDA like all other service providers.
"Although there are special rules, set out in our code of practice, where a person's disability may have a bearing on the risk to be insured, in this case there was no reason why the insurance cover provided for Mr Hughes should be limited as it was."
She added that the commission was pleased Abbey National had recognised this by removing the exclusions and reviewed its procedures to avoid similar mistakes with future clients with albinism.