In Association belge des Consommateurs Test-Achats ASBL v Conseil des ministres [2001] C-236/09 the European Court of Justice (ECJ) ruled that taking the gender of an insured individual into account as a risk factor in setting premiums for insurance contracts constituted discrimination and was in breach of EU rules on equality.

The ruling is expected to have a significant impact in the areas of car and medical insurance and pension schemes where it has been the standard practice of insurers to set premiums based on statistics about differing life expectancies or road accident records associated with different genders. For example, men, particularly those under the age of 30, can currently pay a car insurance premium twice as high as for women of the same age due to the increased statistical likelihood of men being involved in road traffic accidents. Women, on the other hand, currently receive a smaller annuity from a pension fund of the same size as their male equivalents as a result of the greater life expectancy associated with women.

The implementation of unisex rates is likely to see a reduction in the rates paid by one gender balanced by an increase in the rates paid by the other. However, there is a concern that unisex premiums will not meet completely in the middle because of the costs to the insurance industry of repricing and updating their systems. This would mean both genders paying towards the higher rate.

The ruling will take effect on 21 December 2012, giving national governments and the European insurance industry some time to consider how to implement the change.

Click here to read the judgment of the ECJ.