Lower insurance costs for women 'a breach of EU law', court hears

Lower insurance costs for women 'a breach of EU law', court hears

European judges were urged today to rule that insurance companies are breaking EU law if they charge women lower premiums than men because they pose a lower risk.

Basing insurance rates on statistics about the differing life expectancies or road accident records of men and women is standard practice across Europe.

It is specifically permitted in EU anti-discrimination rules which allow member states to discriminate on insurance rates and benefits "if sex is a determining risk factor, and that can be substantiated by relevant and accurate actuarial and statistical data".

But a senior official at the European Court of Justice has said that concession is countermanded by "higher-ranking" equality provisions set out in the Charter of Fundamental Rights in the Lisbon Treaty.

If Advocate General Juliane Kokott's legal "opinion" is backed by the full court in a final verdict later this year, it could mean higher insurance premiums for women in future.

The move was attacked as "madness" by UK Conservative MEP Ashley Fox.

"This opinion, if taken on board by the European Court of Justice, will spell the end of cheap car insurance deals for women and cause the loss of many jobs in this sector of the insurance business," he warned.

"The decision to afford cheaper car insurance to women is not based on discriminating factors but on solid statistics and fact. Women have fewer accidents than men and claim less than men.

"This Advocate-General's opinion abjectly fails to take these crucial factors into consideration.

"It is simply madness to wipe out a whole market on what is effectively the whim of the Advocate-General. If this opinion becomes EU law it will mean higher premiums for everyone."

But Ms Kokott said it is a clear breach of fundamental rights to take the sex of an insured person into account as a risk factor in insurance contracts.

"A summary of the fundamental rights guaranteed at union level is now to be found in the Charter of Fundamental Rights of the EU, which has the same legal value as the treaties since the entry into force of the Treaty of Lisbon," she said.

"Even before the entry into force of the Treaty of Lisbon, when the charter had not yet acquired any binding legal effects, it could however be referred to as a source of inspiration."

She said there was a sweeping assumption that the different life expectancies of males and females, the differences in risk-taking when driving, and the difference in their inclination to use medical services - "all of which merely come to light statistically" - are essentially due to their sex.

"In fact, however, many other factors play an important role in the evaluation of the above mentioned insurance risks. For instance, the life expectancy of insured persons is strongly influenced by economic and social conditions as well as by the habits of each individual - the kind and extent of the professional activity carried out, the family and social environment, eating habits, consumption of stimulants and/or drugs, leisure activities and sporting activities."

It is therefore "legally inappropriate" to link insurance risks to a person's sex, said Ms Kokott: "Differences between people, which can be linked merely statistically to their sex, must not lead to different treatment of male and female insured persons when insurance products are developed.

"Gender is a characteristic which, like race and ethnic origin, is inseparably linked to the insured person as an individual and over which he has no influence."

Proposing that the European judges declare sex discrimination for insurance purposes invalid, she goes on: "The court would be keeping good company if it delivered such a judgment: more than 30 years ago the Supreme Court of the United States of America held in connection with pension insurance funds that the Civil Rights Act of 1964 prohibits different treatment of insured persons on the basis of their sex."

The case was brought by the Belgian consumer association, challenging the use in Belgium of statistics based on gender. But a ruling outlawing gender-based analysis for insurance purposes would apply in all 27 EU countries.

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