Use of gender by insurers: House of Commons written statement on ECJ judgment

On 1 March 2011, the European Court of Justice (ECJ) ruled that the use of gender as a risk factor by insurers should not result in individual differences in premiums and benefits for men and women, with effect from 21 December 2012.

A written ministerial statement by Mark Hoban, the Financial Secretary to the Treasury, was published on 30 June 2011. In the statement, Mr Hoban set out the UK Government’s understanding of the judgment. Mr Hoban said that the Government were very disappointed with the judgment, which it expects to have a negative impact on consumers. The Government believes that nobody should be treated unfairly because of their gender, but that financial services providers should be allowed to make sensible decisions based on sound analysis of relevant risk factors.  

Mr Hoban stated that the Government’s view is that the judgment only applies to new contracts for insurance and related financial services entered into on or after 21 December 2012. In such contracts, the use of gender as a risk factor should not result in individual differences in premiums and benefits for men and women. However, any contracts with gender-sensitive pricing of premiums or benefits concluded ahead of 21 December 2012 can continue unchanged after that date.  

The Government will therefore proceed with amendments to schedule 3 of the Equality Act 2010. These amendments would be effected by Statutory Instrument under Section 2(2) of the European Communities Act 1972, which the Government proposes to make early next year. The Government is proposing to consult on a draft order, including a full impact assessment, in the autumn.  

The Government is working with the European Commission and other member states to ensure a unanimous view across the EU of the implications of the judgment, and the factors that need to be considered by member states in their implementation of the judgment. The European Commission has said that it is proposing to issue guidance on the interpretation of the judgment and its implementation by member states. The Government welcomes this and will press the Commission to publish the guidance as soon as possible.