Europe establishes guidelines for interpretation of insurance gender pricing regulation

Gender Rating for InsuranceThe European Union has now established a set of guidelines that are designed to provide insurers with some assistance with the interpretation of a ruling made by the EU court that states that it is no longer permitted for insurance companies to use gender as a factor for calculating the premiums that will be paid for various forms of coverage.

The insurance industry has heavily criticized the ruling, which reversed years of traditional practice by insurers who have used gender as a part of their formulas for determining product pricing for various insurance products ranging from automobile coverage to insurance policies. Insurers have been given until December 21, 2012 to put the ruling into effect.

The EU’s new guidelines help insurance companies to understand precisely which types of insurance product will be effected by the ruling. They indicated that there is a ban on gender discrimination for any insurance contract that closes after the December 21, 2012 deadline, even if the initial offer was created ahead of that date. Furthermore, the new regulations will also apply to insurance contracts that are pre-existing but that are then extended after December 21.

Equally, though, any insurance contracts that extend automatically from a pre-existing contract will not qualify for this ruling. Nor will those where changes are being made to a contract hat is already in existence; for example, a policy when changes are made to the premiums where it isn’t necessary to obtain the consent of the policyholder.

Moreover, policies won’t be effected by the ruling merely because there was a transfer to one insurer of a part of an insurance portfolio to another.

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