With less than 12 months to go before the ECJ ruling on gender
discrimination comes into effect, there is still a considerable
amount of confusion and uncertainty in the market regarding how
insurance companies should respond.
At a recent seminar hosted at our offices in London, we set out
to explore the background to the ruling, analyse the legislation
and consider how companies should best assess the risks that it
Despite the uncertainty presented by the ECJ ruling, one fact
remains clear: it will potentially impact millions of insurance
policies worth billions of pounds, and there is a very real risk
that insurance contracts could unravel if insurance companies
interpret the ruling in the wrong way.
At the heart of the ruling is the concept that premiums and
costs for new insurance contracts should not differ on the basis of
gender. However, the uncertainty lies in what should be considered
a 'new' contract, as the European Commission and HM
Treasury are currently providing conflicting guidance around
The EC has issued guidelines stating that a new contract
includes any amendment to the terms or conditions of an existing
contract, as well as a renewal of a contract; but that a tacit
renewal is not a new contract.
However, issues of contract law are determined on a national,
not Europe-wide, basis. In the UK, HM Treasury has clearly stated
in its consultation on the UK response to the ruling that the
question will be a matter of UK law – which will not
necessarily accord with the Commission's view.
The Commission has provided some guidance on when it considers
gender may still be taken into account and although this is very
helpful it is just guidance – there is no Court ruling on
the issues and the position is still not free from doubt.
To a certain extent, companies are stuck between a rock and a
hard place. They have to proceed very carefully, based on a full
understanding of the Commission guidance and UK contract law, and
decide how they wish to interpret the ruling. A conservative
approach reduces the risk of challenge but will have an impact on
pricing and, potentially, competitiveness.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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