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Women To Pay More For Insurance – Fair For The “Fairer” Sex?

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This just in from Europe. Is this coming to a Country, Province, or State near you? Statistics have consistently shown that women live longer and have fewer automobile accidents. Certainly, this means that men generally pay more for this type of insurance. Where is the line drawn for fairness? With this, women will certainly see increases in the cost of life insurance and automobile insurance, while men will pay less. Is the next step age "discrimination". Should a 20 year old female pay the same for life insurance as a 75 year old male? Who is subsidizing who?

Lets try and use the same "discrimination" for tax purposes. If services are the same for all homeowners in a given jurisdiction, is it fair that the owner of a more expensive home have to pay more? How about income tax? Is it fair that someone who earns more than another have to pay more? Where is the line drawn?

Here is the article -

The European Union's highest court has outlawed any discrimination between men and women as actuarial factors when calculating premiums for life and property and casualty insurance policies.

"The use of actuarial factors related to sex is widespread in the provision of insurance and other related financial services," the EU Grand Chamber wrote in its judgment in Yann van Vugt and Charles Basselier v. Conseil des ministres, posted on Mar. 1, 2011. "In order to ensure equal treatment between men and women, the use of sex as an actuarial factor should not result in differences in individuals' premiums and benefits.

"To avoid a sudden readjustment of the market, the implementation of this rule should apply only to new contracts concluded after the date of transposition of this directive."

That would basically give European insurers up until December 2012 to make the transition.

Articles 21 and 23 [of the EU] Charter state, respectively, that any discrimination based on sex is prohibited and that equality between men and women must be ensured in all areas," the court found, noting that Article 5(2) of EU Directive 2004/113 provides for equal treatment between men and women in the access to and supply of goods and services. "Consequently, it was permissible for the EU legislature to implement the principle of equality for men and women – more specifically, the application of the rule of unisex premiums and benefits – gradually, with appropriate transitional periods."

The court's decision will create some uncertainty in the market during the transitional period, says Noleen John, a legal consultant for international legal practice Norton Rose LLP.

"It also seems likely, in view of the length of the transitional period, that insurers may need to use uncertainty premiums until they have sufficient data in relation to the carrying on of business on this new basis. This could result in higher premiums or lower benefits for certain policyholders (female motorists and male annuitants)."

The decision also may create some uncertainty about the future of other established actuarial factors used to establish insurance premiums.

"There is going to be uncertainty in the insurance market for some time as a result of this decision," says Ashley Prebble, insurance partner at Norton Rose LLP. "It is likely that the decision will require the European Commission to clarify the position with regards to other potential areas of discrimination, particularly age and disability.

"This might be done through a protocol setting out exactly what insurers will be able to do in terms of differentiating the risks posed by different categories of policyholders"

Courtesy of CIP Society Advantage Daily

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