Women Face Higher Auto Insurance Rates from EU Gender Equality Law

If the European Court of Justice accepts an E.U. Advocate General's advice tomorrow when it rules, E.U. insurers will no longer be able to charge gender-based different prices on a range of products including car insurance, private medical insurance, pension schemes and annuities.

Tomorrow, March 1, 2011, the European Court of Justice will decide whether young women will have to pay the same auto insurance rates as young men, despite the fact that the latter cause more accidents with more severe losses.

The decision has its roots in the 2007 European Union Gender Directive, which outlaws charging different goods or service prices to men and women. The law permitted E.U. member countries to enact their own exceptions, and they generally did with regard to insurance products, where their sellers could account for differences actuarially.

However, a man appealed to courts in his home country of Belgium, asserting that it was illegal that he was charged more for his car insurance than his wife. Belgian courts have allowed the man to appeal to the European Court of Justice.

The European Court of Justice has solicited an opinion from the EU's Advocate General in the matter. Her advice is significant because the Court has accepted the Advocate General's opinion in about 75 percent of cases, according to a source.

As the U.K.-based Telegraph reports, the Advocate General's opinion supports the Belgian's claim. If the European Court accepts her reasoning, the consequences could negatively impact both men and women, and with regard to more than one line of insurance products:

[The] Advocate-General at the European Court of Justice has advised judges that the concession in the EU "Gender Directive" is countermanded by "higher-ranking" equality provisions set out in the Charter of Fundamental Rights in the Lisbon Treaty.
If that legal "opinion" is upheld in Tuesday's final verdict, it will mean insurers can no longer gender-based different prices on a range of products including car insurance, private medical insurance, pension schemes and annuities.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio