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1 March 2011 Last updated at 10:08
Insurance premiums to change after ECJ gender ruling
Men and women will pay the same car insurance premiums in future
The court was ruling on a challenge by a Belgian consumer group Test-Achats.
It had argued that a current exemption for insurers contradicted the wider European principle of gender equality.
"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the ECJ said.
The requirement for unisex insurance premium and benefits will start on 21 December 2012, giving national governments and the European insurance industry time to adjust.
Different risks
For car insurance, women are generally a lower risk to insure than men but will, in due course, have to pay the same premiums.
The British Insurance Brokers' Association (BIBA) said currently the cost of the average car claim by an 18-year old man was £4,400, while that for an 18-year old woman was £2,700.
"The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums."
cheeRS
Insurance premiums to change after ECJ gender ruling
Men and women will pay the same car insurance premiums in future
- Insurers cannot charge different premiums to men and women because of their gender, the European Court of Justice (ECJ) has ruled.
The court was ruling on a challenge by a Belgian consumer group Test-Achats.
It had argued that a current exemption for insurers contradicted the wider European principle of gender equality.
"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the ECJ said.
The requirement for unisex insurance premium and benefits will start on 21 December 2012, giving national governments and the European insurance industry time to adjust.
Different risks
For car insurance, women are generally a lower risk to insure than men but will, in due course, have to pay the same premiums.
The British Insurance Brokers' Association (BIBA) said currently the cost of the average car claim by an 18-year old man was £4,400, while that for an 18-year old woman was £2,700.
[Annuity] rates will be volatile for the next few months as insurers monitor their new business ”
"The ruling will have a significant effect on the insurance industry which has used the system of risk based pricing to award discounts to lower risk drivers like young females who are statistically safer drivers," said Graeme Trudgill of BIBA."The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums."
cheeRS
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