The Gender Directive (Council Directive 2004/113/EC) came into force in December 2004 and was due to be implemented by Member States by 21 December 2007.
Implementation in the UK has been delayed while the Government considers the
precise form the implementing Regulations should take.
British insurers use the gender of an insured person as a rating factor for a number
of insurance products, such as life insurance, motor insurance, critical illness cover and private medical insurance. This approach is threatened by the Gender
Directive, which aims to implement the principle of equal treatment between men
and women in the access to and supply of goods and services. The Directive’s
Article 5 provides Member States with two options:
• To ban all differential treatment based on gender in the provision of insurance
products or
• To allow gender-based treatment, subject to conditions regarding the relevance
and accuracy of the data on which the differences are based and the publication of
gender-related data.
The UK Government has gone for the second of these options. This means that the forthcoming Regulations will make clear that, where there are proportionate
differences in an individual’s premiums and benefits as a result of gender being a
determinant factor in risk assessment, then these differences must be based on
relevant and accurate data, and this data must be compiled, published and
regularly updated.
In the Lloyd’s market, this will probably have most impact in personal motor
insurance, where many insurers charge lower premiums to women drivers, and in
life insurance, where women also usually pay lower premiums, reflecting their
longer life expectancy. Other insurance products may also be affected, such as
travel or health insurance. After the coming into force of the new Regulations,
insurers can only continue with differential treatment if it is based on relevant and
accurate actuarial and statistical data, and if this data is compiled, published and
regularly updated in accordance with guidance issued by the Treasury.
Some other Member States have implemented the Directive without the ‘opt out’,
so that gender cannot be used in any circumstances as a rating factor.
Putting up the cost of women’s insurance premiums was probably not among the
aims of European legislators when they started to discuss a directive on sex
discrimination. They would probably respond that, even if women lose out in this
area, the Directive will bring them benefits in the provision of many other goods
and services.
The Gender Directive will probably not be European legislators’ last attempt to deal
with so-called unfair discrimination. European insurers should be prepared to deal
with measures designed to tackle age discrimination at some time in the future.
