The Association of British Insurers has admitted it could be powerless to oppose gender equalisation if the European Court of Justice rules that underwriting on the grounds of sex should be banned.
Critics have warned that if EU advocate general Juliane Kok-ott’s call for a ban is accepted in full by the ECJ, it would harm consumers as providers would be forced to bring male annuity rates in line with rates offered to women.
In an interview with Money Marketing, acting director of life and savings Helen White admits that the industry is effectively at the mercy of the European court because it is a legal rather than political matter.
However, the ABI says it is in discussions with lawyers over possible action if the ECJ agrees with Kokott.
White says: “Consumers are not going to get a better outcome from this but it is not a political decision and it is not a decision about making legislation. It is a legal interpretation decision by the court and you cannot lobby the court because if you do it is potentially very dangerous because they are not likely to take kindly to it. So the view that we and the Government are taking on this is that we will have to wait and see what happens next year.”
White also warns that policymakers could face a “backlash” from disgruntled consumers if reforms to the flexible drawdown regime are forced through next year.
Treasury officials will outline the final shape of a series of financial reforms, including pension annuitisation, when draft clauses for the Finance Bill 2011 are published on December 9. The unveiling of the bill will coincide with a formal res-ponse to the consultation on removing the requirement to annuitise by age 75, which clo-sed on September 10.
White says if the Treasury presses ahead with the reforms under the current timeframe, particularly in relation to new flexible drawdown rules, which are due to be implemented in April next year, consumer confidence could be damaged.
She says: “If policymakers do it in the timeframe they are suggesting and the next day people come to our member companies and say they want to do this, we could have a bit of a backlash on our hands because we cannot give the customer what they want. It is very dangerous to introduce something like that when it cannot be met in practice. It could seriously damage confidence and engagement.”