Test-Achats

In 2004 a European Directive was passed that required member states to put in place laws to combat sex discrimination by 21st December 2007. This was also to apply to the calculation of premiums and benefits in insurance. It did however allow for differences in calculation where the use of sex is “a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data.”

This was challenged in the European Court of Justice by Test-Achats – a Belgian consumer group. In their judgement, the court decided that this exception works against the objective of equal treatment between men and women and the exception would therefore be invalid for contracts entered into from 21st December 2012 – at the latest. This dare is now passed.

This has affected mainly car insurance premiums and benefits paid from annuities in the UK.

As women in general live longer than men, this means insurance companies will no longer be able to pay higher benfits to men based solely on sex. This may not however immediately apply to Occupational Pension Schemes as the judgement in this case excluded “matters of employment and occupation”. A ruling on this issue however may result in a similar decision and trustees of schemes should be aware of this.