A ban on underwriting insurance products on the basis of gender moved a step further while an amendment to protect execution-only business was approved in two separate European Parliament votes last week.
The gender equality directive was approved by MEPs. It will prohibit underwriting life and general insurance products and annuities on the grounds of gender.
UK insurers are lobbying for insurance products to be exempt from the directive which is generally accepted will mean higher motor insurance premiums for women, although annuity rates may rise slightly. The directive goes before the European Council on June 1.
MEPs also overwhelmingly approved an amendment to the investment services directive which had threatened to outlaw execution-only business by introducing a know your customer requirement. The directive was changed after lobbying by Conservative MEP Theresa Villiers.
Speaking in the European Parliament, Villiers said: “Execution-only services and direct offer products will be permitted to continue under this directive. The framework for those products is more complex than I would like but execution-only business can continue.”
Norwich Union spokeswoman Louise Goffee says: “We are opposed to discrimination of any kind but the use of gender in the calculation of insurance premiums is not discrimination but a fair recognition of objective risk-premium differences between the sexes based on actuarial statistics and claims' experience.”
Richard Jacobs Pension & Trustee Services director Richard Jacobs says: “In so far as it applies to annuities, this is discriminatory to men. Women will realise how stupid the whole issue is once their car insurance premiums go up.
“As clients become more sophisticated and there is more information available on the internet, the execution-only market, albeit a small one, will continue to grow.”