ECJ ruling a "seismic event" which will reshape retirement
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Pension experts have branded the European Court of Justice gender ruling a “seismic event” that is set to reshape the retirement landscape.
The ECJ published its ruling today in the test case brought by Test-Achats, who claimed it was gender discrimination to charge men and women differently for products such as annuities and life insurance.
After an opinion statement in September by advocate general Juliane Kokott, the final ruling has confirmed that gender cannot be used as a basis for calculating premiums with effect from December 21, 2012.
Hargreaves Lansdown head of pensions research Tom McPhail says: “This ruling is a seismic event which will fundamentally reshape the retirement landscape. It is now imperative that every investor shops around with their pension fund at retirement; if they do not they risk ending up with a homogenised standard–issue annuity which is almost certain to be a poor deal for them.
“We will monitor the reaction of insurance companies and issue further information regarding annuity rate movements as it becomes available.”
Lifesearch senior policy adviser Matt Morris says: “This is a horrible mistake by the European Court. It is essential for insurers to use gender to calculate risk based on solid actuarial evidence and statistics. It is price differentiation, not discrimination, as it is not a decision that comes down to the whim of an individual.
“The consumer will now suffer. Prices will go up across the board as insurance companies try to build in the new risk. Women currently pay less than men for life insurance, but pay more for income protection.
“It is very unlikely premiums will meet in the middle because there will be huge costs to the industry of repricing and updating their systems so everyone will end up paying the higher rate. Everyone loses.”
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Readers' comments (31)
Alan LAkey | 1 Mar 2011 10:11 am
Calling this decision madness understates the enormity of the insanity we are facing.
Where does this scheming end? Will they ban the use of medical information so that cancer sufferers are treated no different to others?
Will they determine that we can only refer to clients as 'citizen'.
This type of sickness makes the RDR seem plausible!
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John Hutton-Attenborough | 1 Mar 2011 11:24 am
So once again a ruling which will effect the masses and end up costing more to receive back less!
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Anonymous | 1 Mar 2011 11:24 am
Political correctness gone mad yet again. Can anyone appeal?
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John Lacy | 1 Mar 2011 11:25 am
The Gutless Government should do what the Germans and the French would do--quietly ignore the ruling and wait for the EU to start chasing (thats probably about 2 years). Then you contest any ruling (another 2 years) Wait again for another decision whilst being as obstructive as possible (another 2 years) Wait for the fine (another 2 years) and by then the EU will have moved on to something else and we can forget about the whole load of rubbish.
Job done!!!!
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Dominic Thomas | 1 Mar 2011 11:28 am
Its about time that someone stood up to all this nonsense and put the ECJ right on this one. The term "discrimination" is being misused and misapplied.
Are we a nation of whimps now then?
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Anonymous | 1 Mar 2011 11:32 am
This now leaves the door ajar for a consumer group to challenge insurers on the basis of ageism.
What? A 50 year old has to pay more than a 25 year old for Life Assurance? - That's terrible!!!
This could well have a profound impact on the whole industry. The lunatics really have taken over the Brussels asylum.
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Paul | 1 Mar 2011 11:34 am
I'm surprised to read that women pay more than men do for life insurance. Is this a typo? Or have I misinterpreted its meaning?
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Neil Cole | 1 Mar 2011 11:35 am
"Women currently pay more than men for life insurance, whereas men pay less for income protection."
I hope that's just a typo... surely men currently pay more for life insurance because their life expectancy is shorter?
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Anonymous | 1 Mar 2011 11:38 am
Nice to see Matt Morris knows his insurance products. Women pay less for life insurance and more for income protection, not as he stated.
To provide a bit of balance on what the EU has done well, we now get plugs on new electrical goods. Time to leave the EU perhaps?
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Anonymous | 1 Mar 2011 11:50 am
I think I just mourn the loss of 'common sense' in the world today in general.
It seems to me that the Bureaucrats on this side of the channel and the Eureaucrats on the other, have all just 'lost it', and there are major decisions being made by those with absolutely no idea of the consequences of their 'ramblings'
Its a bit like some of the daft rulings that come out of touch judges in the legal system these days
I despair as to where it will all end?
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