The European Court of Justice (ECJ) gave its much awaited ruling in the Test-Achats case on 1 March 2011. The case stemmed from a challenge from a Belgian consumer association asking whether the exemption in Article 5(2) of Directive 2004/113/EC (2004 Directive) is compatible with the prohibition on discrimination on the grounds of gender enshrined as a fundamental right of the European Union. The exemption allows insurers to use gender-related factors in determining premiums and benefits under insurance policies and to apply differentiated terms on the basis of gender in the provision of insurance services.
The ECJ ruled that the exemption in Article 5(2) of the 2004 Directive is invalid. However, the ECJ granted a transitional period of relief for implementation. The effect of this is that, as from 21 December 2012, it will be unlawful to use gender-related factors for determining premiums and benefits under insurance policies. This is significant for many insurers in Europe which use gender as a risk factor for pricing both general and life insurance policies.