The United Kingdom has announced that it will be complying with an insurance ruling coming from the European Court of Justice, the judicial arm of the European Union. The rule bans European insurance companies from imposing gender-sensitive premiums and benefits. This has drawn the opposition of insurers, who argue that premiums are determined by a multitude of complex factors and that limiting their ability to calculate premiums accurately would result in pricing that is either too high or too low for risk.
Despite the opposition, the rule will be enforced after December 21, 2012, according to Mark Hoban, the UK’s financial services minister. The minister has made it clear that the ruling will affect new contracts and not those that are already enforced at the time. Those policies being renewed after the deadline will be subject to the insurance rule.
Several other European nations are adopting the ruling along with the UK. Germany and Sweden, who both serve as home to some of the world’s most prestigious insurance companies, will be complying with the rule beginning in December as well.
The rule stems from an issue originating in Belgium in which consumers, upon learning the factors that contributed to calculating premiums, decried the practice of gender-sensitive pricing. The issue was brought before a consumer advocacy group, Test-Achats, who then brought it before the European Court of Justice. The ruling has received generally positive support from consumers throughout the European Union with its most staunch opponents being the insurance industry.