FSA: Gender Directive - Court ruling on equal treatment of men and women for insurance purposes
March 1, 2011
The European Court of Justice has delivered its ruling on the legality of the opt-out derogation. The FSA are working with the industry and with relevant stakeholders to understand the practical implications of the judgment for firms and for consumers, and will communicate further in the near future.
In the judgment, the Council expressed its doubts as to whether, in the context of certain branches of private insurance, the respective situations of men and women policyholders may be regarded as comparable, given that, from the point of view of the modus operandi of insurers, in accordance with which risks are placed in categories on the basis of statistics, the levels of insured risk may be different for men and for women.
However, the court ruled that to prevent continued derogation from the Directive's aim of achieving equal treatment of men and women, Article 5(2) of Directive 2004/113 should be abolished from 21 December 2012, meaning that from that date, insurance companies will no longer be allowed to use gender as a factor for assessing risk.