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Europe court rules insurance companies may not set rates based on gender

The European Court of Justice (ECJ) [official website] ruled [judgment] Tuesday that an EU directive allowing insurance companies to charge men and women different rates in some countries violates the Charter of Fundamental European Rights [text, PDF] and must be struck down. Article 5(2) of Directive 2004/113/EC [text, PDF] provides that, notwithstanding rules in the directive prohibiting discrimination, EU states may "permit proportionate differences in individuals' premiums and benefits where the use of sex is a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data." The ECJ found this exception incompatible with Articles 21 and 23 of the Charter, which prohibit discrimination based on sex and mandate equal treatment of men and women. The court held:

Such a provision, which enables the Member States in question to maintain without temporal limitation an exemption from the rule of unisex premiums and benefits, works against the achievement of the objective of equal treatment between men and women, which is the purpose of Directive 2004/113, and is incompatible with Articles 21 and 23 of the Charter.
Consumer group Test-Achats [advocacy website, in French], which brought the case, said the decision [press release, in French] is "[a] victory for consumers, men and women, across the EU, one more victory for Test-Achats in its fight against discrimination in insurance." The European (re)insurance federation CEA [advocacy website] criticized the decision [press release], claiming that differences in prices for men and women are based on solid actuarial evidence and warning that prices could go up for a number of groups as insurance companies implement the ruling. The judgment gives member states and insurance companies until December 21, 2012, to end disparate pricing.

In September, Advocate General at the Court of Justice Juliane Kokott [official profile] issued an advisory opinion [text, WSJ report] in the case concluding that the practice of including gender in setting rates violated the Charter of Fundamental Rights. The case was referred to the ECJ [reference for preliminary ruling] in 2009 by the Constitutional Court of Belgium [official website].

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