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4th Jul 2022

Insurance policies should not be based on sex, EU jurist says

  • Women tend to live longer than men and have benefitted from cheaper life insurance in the past (Photo: soylentgreen23)

Insurers should no longer take a person's sex into account when calculating policies, an advisor to the European Court of Justice said on Thursday (30 September), provoking anger in the industry, which adjusts life and health contracts according to whether they are for men or for women.

The preliminary opinion, by Advocate General Juliane Kokott, said that statistics showing different risks for the two sexes may not be used as a basis for treating men and women differently because they do not show an innate difference between them.

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Talking about longevity, which sees women often pay less for life insurance as they tend to live longer, Ms Kokott argued that the difference is due to behavioural habits such as eating, smoking and exercise.

"The Advocate General takes the view that it is legally inappropriate to link insurance risks to a person's sex," said her statement. "Differences between people, which can be linked merely statistically to their sex, must not lead to different treatment of male and female insured persons when insurance products are developed."

"The use of a person's sex as a kind of substitute criterion for other distinguishing features is incompatible with the equal treatment of men and women."

EU law already bans taking sex into account when calculating premiums and insurance contracts. But the existing directive also provides for an exception if differences in risk assessment are backed up by solid statistics.

The case originates from a complaint brought to a Belgian court by a consumers' organisation, Association Belge des Consommateurs Test-Achats, and two individuals, challenging higher male life insurance premiums.

The court is not obliged to follow the advocate general's opinion in its overall ruling but precedent shows that it often does.

The insurance industry has already reacted strongly to the opinion. The European insurance federation (CEA) warned of its potentially far-reaching implications.

"If this risk-based, factual principle is not maintained, premiums will increase, coverage will decrease and some products will be withdrawn from the market entirely. Insurers must be able to calculate their premiums in a fair and sustainable way, using all relevant factors," said Michaela Koller, CEA director general.

"Insurers differentiate. They do not discriminate," she added.

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