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.”