ECJ Ruling On Unisex Insurance Premiums

Author:Mr Matthew Ryan
Profession:Dillon Eustace

The European Court of Justice (the "ECJ") has ruled1 that Article 5(2) of Council Directive 2004/113/EC2 (the "Directive") is invalid with effect from 21 December, 2012. This ruling will undoubtedly have a significant effect on the level of insurance premiums throughout the EU, with insurers prohibited from taking a person's gender into account when calculating premiums from that date. The ECJ's ruling results from an Article 2673 reference by the Belgian Constitutional Court which requested the ECJ to determine whether or not a domestic Belgian law implementing Article 5(2) of the Directive was valid in light of the principle of equal treatment for men and women4. Equal treatment The Directive lays down a common framework throughout the European Union for the prohibition of discrimination based on gender in the access to and supply of goods and services. Recital 4 to the Directive makes express reference to Articles 21 and 23 of the Charter of Fundamental Rights which prohibits any discrimination based on gender and requires that equality between men and women is ensured in all areas. Recital 18 of the Directive reflects that in order to ensure equal treatment between men and women, the use of gender as an actuarial factor should not result in differences in individuals' premiums and benefits. Article 5(1) the Directive gives substantive effect to Recitals 4 and 18, providing that: "Member States shall ensure that in all new contracts concluded after 21 December 2007 at the latest, the use of sex as a factor in the calculation of premiums and benefits for the purposes of insurance and related financial services shall not result in differences in individuals' premiums and benefits." The derogation Article 5(2) of the Directive contains a derogation from the provisions of Article 5(1), allowing Member States to defer the introduction of measures necessitated under Article 5(1) until at least 21 December, 2012, so long as the use of gender as a determining factor in the assessment of risk is based on relevant and accurate actuarial and statistical data which is publicly available. At that date the Member State was, until now, permitted to reassess the situation within certain parameters. The basis of the ECJ's ruling In ruling that Article 5(2) of the Directive is invalid with effect from 21 December 2012, the ECJ had regard to the following...

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