ECJ decision to increase premiums for insured and other benefits

January 4, 2011

The ECJ has held that insurers cannot take gender into account as a risk factor when setting premiums and payouts in respect of annuities, retirement savings and accident cover.

The decision is likely to affect many insured benefits provided by employers such as life assurance and private medical cover and have the effect of increasing premiums.  The impact of the decision is less clear in respect of occupational pension schemes which are presently allowed to use gender-specific actuarial factors (under the Equal Treatment Directive and, in the UK, included in the Equality Act 2010) which are based on data which broadly demonstrates that women live longer than men.   However, an equal annuity is now likely to cost more for a woman as she will receive it for longer than a man.

The ECJ considered that taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination contrary to Articles 4(1) and 5(1) of EU Directive 2004/113/EC which implemented the principle of equal treatment in the access to and supply of goods and services.  A rule providing for unisex premiums and benefits will come into effect from 21 December 2012.  During the transitional period between now and then EU member states need to decide what action to take on domestic laws and give companies time to adjust and consider the potentially substantial knock-on effects.


Association Belge des Consommateurs Test-Achats and Others (Social Policy) [2011] EUECJ C-236/09 (01March 2011)

For further information or to discuss the issues raised, please contact Guy Abbiss, David  Widdowson  or Stephen Wright on +44 (0) 203 051 5711


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