Judgment on 1 March could spell the end for gender-based premiums
The European Court of Justice is due to deliver a judgment on 1 March that could see an EU-wide ban on gender-based pricing in insurance.
But it is not only the verdict that has the industry concerned. Terms of the judgment handed down will have drastically different consequences for insurers and brokers.
Here Insurance Times explores some outcomes of the decision and the role parliament could play in easing insurers’ concerns.
A retrospective ruling with no transition period
Should the ruling judge make no specific comment on the decision being retrospective, nor include a transition period, the judgment will take effect immediately and will be considered retrospective.
This means simply that insurers and brokers will no longer be able to able offer gender-based premiums from 2 March.
Insurers could also find themselves immediately open to compensation claims from anyone who feels they have been paying over the odds for insurance.
Clyde & Co discrimination specialist Nick Elwell-Sutton says: “Men would be able to say, ‘I was charged unfairly on the basis of my sex for a motor insurance policy. If I was a woman, I would have been charged less. Therefore I have been the victim of discrimination and ought to be compensated for losses going back to 2004 when the derogation was put out in the EU’s Gender Directive’.”
UK parliament
But Clyde & Co partner Andy Tromans insists potential litigation should not be the focus for insurers. “You’ve got UK national parliamentary law directly conflicting with European law. That can’t be taken out on the insurance industry because the insurance industry has done everything right.”
Elwell-Sutton explains: “UK courts would have to make a ruling to give effect to the judgment from the ECJ. If they can’t read UK law in direct line with the ECJ ruling, parliament would need to change the underlying law.
“Hitting beleaguered families and an industry in a very competitive environment is not great news for the UK government to be delivering.”
Regardless of the outcome on 1 March, insurers and brokers start preparations early to avoid being caught out.
“The industry is preparing for the worst-case scenario but is also hoping that doesn’t happen,” Tromans concedes.
