ECJ rules insurers cannot price on gender
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The European Court of Justice has ruled that insurers cannot price products based on gender from December 21, 2012.
The move will mean that providers will radically have to change the way they price annuities, life insurance, and health insurance.
The ruling follows a test case brought by Belgian consumer group Test-Achats which questioned whether men and women should be offered different pricing on insurance products, as this could be interpreted as a form of gender discrimination.
European Court of Justice advocate general Juliane Kokott gave an opinion statement last September in which she said she was minded to agree.
Today’s ruling states that the opt out clause of the EU gender directive, under which insurers have previously been able to offer men and women different pricing, will cease to be effective from December 21, 2012.
There had been fears among the industry about what transition period would be given to meet any new requirements, with concern that the ruling could be brought in with immediate effect.
Lifesearch has called the ruling a “horrible mistake”, and believes that as a result prices will go up across the industry.
Association of British Insurers acting director general Maggie Craig says: “This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade. The judgement ignores the fact that taking a person’s gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance.
“Adaptation during this transition period until December 2012 will be challenging, but all insurers will be doing everything they can to ensure as smooth a change as possible for customers.”
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Readers' comments (51)
Martin Rivers | 1 Mar 2011 9:26 am
Why on earth are we still so involved in Europe?
Great Britain - let's remember what it stands for. Equalisation is right where it is logical and practical but IMO, from an actuarial point of view, this is crazy.
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David Black | 1 Mar 2011 9:29 am
So, why do they not reduce the cost of car insurance to a male? Why should it cost a female more to match a man - why does it not cost a man less to match a female. The EU strikes again......
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Norm d'Plume | 1 Mar 2011 9:30 am
And what if insurers say they are withdrawing from offering products altogether? They don't have to supply them.
It's time we told the EU to sod off!
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Anne Uity | 1 Mar 2011 9:32 am
While the decision itself is questionable, at least some common sense has been shown in the application. People have time to make a decision on their retirement.
I feel this is an opportunity for advisers to show their worth by ensuring all who may be affected are provided with the advice they need to optimise their retirement income.
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Patrick McCarry | 1 Mar 2011 9:32 am
So whats next? smokers being unfairly charged more for insurance. BMI factors, family history, and AGE? Surely charging more for cover to a 50 something over a 20 something is ageism? Daft ruling
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Michael Fallas | 1 Mar 2011 9:39 am
No wonder we have the problems in this country with such nutty decisions from an unelected EU.
Before long I suppose we won't be able to call men Mr and women Mrs, Miss or Ms !!
No doubt insurers will find this an an excuse to increase premiums for everyone.
Well done Belgian Test- Achats, you have cost everyone dear to prove a point.
Time for a "class action" against the EU for not acting in our best interests, costing us a fortune and for being unelected by those they claim to represent.
That should do for starters and give those nutty judges something to keep them busy for awhile.
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Anonymous | 1 Mar 2011 9:39 am
more EU rubbish
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Richard Whitaker | 1 Mar 2011 9:42 am
Daft I agree and not very TCF!
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Socrates | 1 Mar 2011 9:43 am
If a vehicle driver fails to brake or take avoiding action, the resulting collision is attributable to Newton's First Law of Motion.
As Europe seems able to countermand the laws of nature - as, for example, the established fact the women's average lifespan is longer than men's - perhaps it is now time to reduce road accidents by repealing Newton's First Law.
A directive should suffice.
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John Lacy | 1 Mar 2011 9:44 am
Mr Black---if the insurance companies can't make a reasonable profit on the current set up on car insurance why on earth are they going to reduce the cost to their most accident prone sector?
I can see some companies saying that they will withdraw from the young male driver sector completely and just lend to females so that they can't be criticized for something they don't offer.
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