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ECJ rules insurers cannot price on gender

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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There are 52 comments at the moment, we would love to hear your opinion too.

  1. 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.

  2. 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……

  3. 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!

  4. 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.

  5. Patrick McCarry 1st March 2011 at 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

  6. Michael Fallas 1st March 2011 at 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.

  7. Richard Whitaker 1st March 2011 at 9:42 am

    Daft I agree and not very TCF!

  8. 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.

  9. 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.

  10. P.S. The alternative is for insurers to rub their hands and offer women life assurance at men’s rates and male annuitants women’s annuity rates.

    Buy some shares in life assurers! 🙂

  11. Monsieur d’Plume (above) is absolutley right. What has this to do with the EU?

  12. It’s a clasic case of the European courts messing with everything, including the laws of nature. As a male when the final date of my passing arrives, I think I will get the European courts involved because I suspect I have a dscrimination case to build on. Protection rates next? Who’s paying for this nonesence decision? Males.

  13. I expected this decision but still think it is wrong.

    And for them to go on and look at age and disability for be the end of insurance as we know it.

    Time for the Government to grow a backbone and get things changed.

  14. Jonathan Covill 1st March 2011 at 9:55 am

    I’m sure that over the coming years pre and post implementation there will be a number of challenges to this being discriminatory as one sex or the other has a higher cost against potential benefits.

    Also got to ask if this will practically end demand for defined benefits pensions and annuities for men as rates are lowered again and less potential time to receive the income compared to women. Clearly no equality there!

  15. Rumplestiltskin 1st March 2011 at 9:57 am

    Anne Uity. Very well put.

    David Black, because the premiums wouldn’t match the claims arising. However, where does it say what “equalisation” means and where insurers must adjust their pricing points to ? .. and if you can only speak English, well the ECJ says a rather discrimonatory touche’.. see here (Latvian, Greek anyone..but not English )

  16. Whilst I cannot see any support for this ruling whatsoever, at least the industry has some time to prepare for the implementation date.

    Shame it coincides with RDR!!!! The Providers and Distributors have enough to do with RDR let alone another major upheaval in their practices.

  17. Career civil servants and common sense!!

    Opening a dore for a lady and allowing her to walk through will soon be deemed harassement.

    This may be a appear a victory for women but think on. Seperated Male / female toilets are banned from 2013 and ladies , men not lifting the seat is a genetic fact of life.

  18. Once again we bow down to the European bureaucracy, but it was our leaders that created this nightmare we call the European Parliament.

    I for one am all in favour of Great Britain but we have, I fear gone too far down the road for a reversal and all we are left with is England, Wales, Scotland and Northern Ireland, but not necessarily in order of importance. Oh! and them across the channel that now control what was the centre of the greatest empire in the world.

    Men statistically die before women. Women statistically are more likely to suffer from a critical illness. Smokers statistically peg out before non smokers. I fear the actuaries have a great deal to discuss.

    As for our leaders, our politicians, well they are used to talking and enacting drivel.

  19. I must have missed a month. I thought it was March 1st today not April 1st

  20. Unless I am mistaken Luxembourg receives more EU funder per head of capita than any other EU country and is hardly a poor country so is that not DISCRIMINATION and why is that not looked into?

  21. Just seen the erreor in my earlier post. It should have been “a door” what i typed was “a dore” Freudian slip!

  22. I totally agree that this ruling is madness but let’s not get jingoistic or xenaphobic about it by blaming the foreigners. Don’t we have plenty of our own stupidity in so called Great Britain

  23. Gerald Lambourne 1st March 2011 at 10:16 am

    So what next? Insurers have to charge the same rates for a 65 year old as a 25 year old so there is no age discrimination?

  24. Very good decision! Quite right!

    Let’s take this thinking to its’ logical conclusion and ban insurers from discriminating on grounds of health.

    Why should providers be allowed to discriminate against terminally-ill people by preventing them from taking out £1,000,000 of life cover on their death beds?

    In fact, why stop there? Stop discriminating against dead people and allow their families to take out back-dated cover. It makes as much sense as this barking ruling.

    The ‘golden rule’ of insurance is: the greater the risk, the higher the cost of your cover.

    This daft ruling must be overturned. It’ll result in providers withdrawing from the market and less choice and greater cost for all consumers – except for 17-year old lads, who’ll not be able to believe their luck when they renew their the insurance on their Vauxhall Novas!!

  25. So, ending sex discrimination really does come
    at a premium!

    And, it’s gonna be goodbye to Sheila’s Wheels, and hello to Tommy’s Tyres!

    And what future for Santa with an opt out clause timed for the 21st of December?

  26. John Lutwyche (Euclid) 1st March 2011 at 10:30 am

    Well said Socrates,

    But don’t forget that every action has an equal and opposite reaction (Newt’s 3rd). So why don’t we make life difficult for them? Alternatively, we could leave the EU altogether as we should have done years ago.

    What we need in this Country is a Government with the backbone, will and determination to cock-a-snoop at the EU as the French have done for years when it suits them to do so.

    Equalising rates and disregarding gender, what a joke!!!!

  27. As Mr Mannering once said “Test-Achats you stupid stupid boy”

  28. If it’s not the mad ideas of the FSA it’s then the EU – I’m thinking where will it all end. What is the cost to the insurers of all this nonsense and who will have to pay for it all? And for what?
    Insurance is priced on risk men and women are different like it or not.
    I would expect the insurance industry to appeal this misguided judgement in the meantime I’m voting UKIP

  29. Insurance companies offer insurance products and annuities based upon their assessment of risk which, in turn, is largely based upon statistical data.

    It is totally perverse for these euro twits to insist that one of the most significant pieces of statistical information is completely ignored.

  30. Can we take this to it’s logical conclusion – one rate for all, irrespective of gender, smoker status, age or health? At least clients wouldn’t need to fill in 30 odd pages of intrusive questions before taking out life assurance! £500,000 of cover sir? That will be £100 per month. You’re 89 with incurable cancer? You’ve got a bargain then!

  31. Does this mean that they won’t be able to price on age soon?

  32. Perverse, illogical, idealogical twaddle that will cost us all dear.

    Why do we put up with these EU morons running roughshod over the UK.

    Cameron, take heed – if you allow this country to sink further into the Euro mess and grotesque HR quagmire, your party will be held to account.

    How much more evidence do we need that the whole European experiment is having disastrous consequences for the UK ?

  33. I do not understand that gender underwriting can be argued as being sexual discrimination as the risk is based on facts and statistics. They could take this further and say that all products had to be gender neutral too and ban features as cover for breast and prostate cancer.

    I did read somewhere that the French next want to ban risk based on age, too. Great, isn’t it? If they do that I am not going to bother with life cover until I am over 60 as the premium would be the same as if I took it out as a 25 year old. Statistically and based on family history, I may live a long life, so why bother before??

  34. So … the joke that calls itself the “European Court of Justice” has now decided that men and women are the same… have same life expectancies and are as good (or bad) as each other behind the wheel.

    In that case, I call upon all like-minded, red-blooded, testosterone-filled males, to join me in taking the following case to the Court: males (as part of their ‘human rights’ – and, being ‘the same’ as women) to have the right to bear children. Furthermore, we insist that the Court take the relevant action and make the appropriate arrangements to have a uterus implanted (free of charge) into any male that wishes to give birth.

    THAT’S how ludicrous this new ruling is!

    Make a mockery of “justice” and flies in the face of common sense.

  35. I am 65 and so is my wife. We both have £10,000 each buy an annuity for £500 per year. My wife, having a life expectancy about 3 years longer than me will end up £1,500 better off than me. Where is the equality in that?

  36. Does this mean that Insurance companies not based in the EU could offer policies based on actuarial risk to EU citizens. For instance North American.if so we give a massive advantage to the rest of the world.

  37. Having been the Anon author of the jokes about Santa etc – let me now be serious.

    @ Just a thought and others

    Did you know:

    30 years ago, the Supreme Court of the United States ruled that the Civil Rights Act of 1964 prohibits different treatment of insured persons on the basis of their sex in connection with pension funds.

    Insurers have already shown flexibility as Belgium, Bulgaria, Cyprus, Estonia, Latvia, Lithuania, the Netherlands and Slovenia apply unisex premiums for car insurance.

    Those are extracts from the link below:

    But also included in the judgement were these words:

    Today’s ruling also underlines the power and importance of our Charter of Fundamental Rights. It has the same legal value as our EU Treaties. No EU legislation can be adopted that conflicts with the rights and principles guaranteed by the Charter.

    The European Commission issued a ‘fundamental rights checklist’ last October to make sure that all laws proposed comply with the EU Charter (see IP/10/1348). This checklist ensures that our rules are beyond any reproach. We have also called on the European Parliament and the Council to take a similar fundamental-rights-friendly approach when they add amendments in the EU law-making process. Today’s ruling confirms how essential this is.

    Now consider that against the FSMA and any subsequent legislation for the new bodies yet to come – and then relate that to say the lack of a long stop as it applies to you.

    There may be an importance to this – which is being overlooked?

    Link here:

  38. what a lot of hysterical tosh.
    Insurers have been warned of this since 2004, and have lobbied for decades to escape the rules on age and sex.What makes insurers above the law ?

    There are more differences between two men or two women than between a man and woman on most insurance classes.That insurers who knew this was coming only keep stats based on gender, and not proper underwriting factors is a disgrace,

    It will force the ever staid life business to stop underwriting by agreement and commitee and follow my competitor.- and underwrite properly ( take lessons from commercial insurance )

    On car insurance -women drive fewer miles than men in lower power lower value cars so of course they have fewer and cheaper accidents.The real statistical test is on claim per mile combined with claim per car value.

    Get a grip people -the hysterical end of the world stuff and little Englander whining- just shows how out of touch with commercial reality many IFAs and life insurance people are.

    Talk to the underwriting pros of commercial insurance, experienced underwriters are spilling their pints in laughter at the amateur way life people underwrite -without taking into account the real risk factors.

    And the funniest bit of all -insurance people are telling customers to buy their product as they cannot plan for the unexpected – and when we get a legal ruling with seven years notice -insurers are all in a dither as few have any contingency plans in place despite private warnings from both the Treasury and the FSA.

  39. Discrimination by occupation is equally illegal, the ECtHR is asking the government some awkward questions relating to two cases before it.

  40. Darrell Monteith 1st March 2011 at 1:02 pm

    Confirmation if ever it was needed that the European union wa sonly ever designed to destroy Britain, having failed to do it in two world wars they are determined to do it by stealth through legislation. Its such a pity no one in British politics has the back bone to stand up to these invaders by stealth

  41. Richard Arnold 1st March 2011 at 1:30 pm

    Ian Youngman.
    Just being an IFA for a moment, so limited underwriting insight.

    There has to be some standard format of risk to enable efficient large volume risk / policies to be accepted without expensive individual underwriting i assume. Your comments appear to be contradictory. Their can be as many differences between two offices as two industrial units for commercial insurance cover. But at base level you make general risk assumptions about each and start with a standard basis of risk to market a policy. If legislation says you have to treat them all the same then individual underwriting is required or you have to price up to cover the generalised risk which ends in cross subsidy not risk apportionment.

    Just becuase an industry has prior knowledge of an EU ruling it does not make the ruling correct. Your comments suggest that you use precise risk exposure based on known facts to determin premium. It is an actuarial fact that women live longer than men. Specificaly on annuities, when their is a deviation from the norm then medical underwiting/ life style etc kicks in to enhance the standard proposition. So i am not sure i get your point.

  42. It is yet another example of legislation and judgements being made by persons with no understanding of the field of expertise they are trying to change, morbity and mortality statistics are facts, women tend to be less aggressive by nature, less inclined to see a vehicle as a status symbol, the next thing will be general insurance, soil conditions and history can be indicators or the liklihood of subsidence, flood history gives rise to discrimination in buildings and contents insurance, as does crime statistics, the EU is an ass, expensive and the sooner it is abolished the better.

  43. Well well some good news for a change, as we no longer need Actuaries, they can downgrade their incredibly difficult qualifications to level 4 and use Eurocrats to take the blame from now on.
    Then they can use become IFA’s, use common sense and logic, personal empathy with real clients, rather than theoretical models to confuse the hell out of everyone else!
    (Apologies to the Actuaries association couldn’t resist it!) :0)

  44. Christian Patricot 1st March 2011 at 3:24 pm

    Male’s annuity rates go down to equalise with women’s. If you have less income, you spend less. You pay less tax. Neither of them is good for any economy and certainly not one trying to get as much money as possible to pay back its debts. If less income in retirement, possibly more demand to claim on social benefits. Even less good for the economy.
    New ruling to come in 21 Dec 2012. New national election in Spring 2015. I have written to my local MP asking him to pass letter on the relevant minister.
    Just in case there is any misunderstanding, I am not a UKIP supporter. I have to respond to D Monteith. You are insulting the multitude who gave their lives to allow the likes of you to vent your opinion. I presume you object to invaders from Poland, Eastern Europe or the sub continent even though a basic knowledge of history would allow you to know they also fought and died to keep you and I free.

  45. Totally Over Sensitive Supercilious European Regulatory Services, (TOSSERS), are not known for their use of common sense, so what did we really expect

  46. Another ludicrous decision by the ECJ judges; still, doesn’t really matter because the world is supposed to end on the day the ruling comes into force.

  47. Graham Spearman 2nd March 2011 at 8:42 am

    What I can’t understand is why are we all just accepting this. To me it is nonsense, particularly when it comes to Annuities and Life Assurance. It has been talked about for a little while now but everybody just seems to accept it. For goodness sake we need a government that will fight rediculous rulings such s this made by unelected people.

  48. The Gutless Prophet 2nd March 2011 at 9:45 am

    One rate to rule them all
    One rate to price them
    One rate to bring them all
    And in the darkness charge them!

  49. Fact:
    Men are from Mars

    Women are from Venus

    Eurocrats are from Cloud Cuckoo Land

  50. A decision made by a female advocate general. Wouldn’t have anything to do with feminism would it as it is a decision completely devorced from reality.

  51. It’s time to put our collective two fingers up to Europe. Enough is enough.

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