The European Union's highest court on Tuesday banned the practice by insurance companies of charging different premiums for men and women, in a move that may raise costs for women and cut pensions for men.
"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the European Court of Justice concluded, ordering insurers to adopt a "unisex" method of setting premiums by December 21, 2012.
Women typically pay less for auto insurance because they are statistically less likely to get into an accident, while men often receive greater retirement payments because they have a lower life expectancy.
Impact on consumers
EU law already bans gender-based discrimination, but the insurance industry has enjoyed an exemption as long as companies regularly update and publish the statistical information on which their premiums are based.
CEA, Europe's insurance industry lobby, was quick to criticize the court's decision, saying the impact on price, benefits and consumer choice could be "significant."
Sajjad Karim, a British Conservative member of the European Parliament, also denounced the court ruling as "utter madness" and a "setback for common sense."
"It is a statistical reality that young men have more accidents than women so it should be reflected in their premiums," he said.
But European Justice Commissioner Viviane Reding welcomed the decision and pointed out that some insurance providers in the EU had already gotten rid of gender-based premiums.
"It is now clear that an insurance company must not distinguish between women and men," she said. "All customers must be treated equally. This is a matter of respect for fundamental rights. It is now also becoming a matter of good business practices."
Author: Andrew Bowen (AFP, Reuters, dpa)
Editor: Susan Houlton