Ruling on insurance price discrimination based on gender will be illegal
Laws preventing price discrimination on insurance policies using gender as a factor are being brought in to comply with a European Court ruling. Up to recently, companies have used the policyholder’s sex as a criterion to formulate a premium for cover. This is most prevalent in the motor insurance industry where prices between young men and women can differ greatly.
Companies charge male drivers more than their female counterparts due to the fact that men are statistically deemed more of a risk on the road. Males also pay more for life cover. This again comes down to statistics highlighting the higher life expectancies of women. However, this practice will come to an end thanks to lobbying from consumer rights groups who argued the case to the European Court of Justice that having distinct premiums for men and women was, in principle, illegal.
From the 21st December 2012, insurers can no longer discriminate between men and women on a range of financial products. The Minister of Justice, Alan Shatter announced yesterday the publication of a bill establishing the obligation of insurance companies to abide by the rules and will affect many financial products such as life assurance, income protection and pensions. Preparations for the deadline are in full swing with the Government now having legislation drawn up.