European court of justice (ECJ) prohibits underwriting premiums based on the gender for car insurance, life insurance and pension annuities. This change could come soon into effect in December 2012. The decision of charging premiums to women and men in insurance contracts constitutes discrimination as taking the gender of the insured individual into account.
This means that there would be no longer discrimination for men and women not only in car insurance, but also in life insurance, private medical insurance, pension plans and as well as the cost of buying annuities. This case was brought by the Belgian consumer association, saying that it is becoming difficult to set pricing structure for men and women based on their gender.
The gender ruling on unisex rates for car insurance could mean that insurance premiums for women under the age of 25 could increase by 25% and in some cases 50% for young drivers which could cost an extra £500- £1000, according to the British Insurance Brokers' Association. And the young men under the age of 25 would likely to see premium rates decreasing by an average of 10%, and in some cases 25%.
This gender ruling will affect not only UK insurance holders but also the insurance industry, because if young men premiums are artificially reduced, it could lead to more opting to choose powerful vehicles by men, thus reducing risk for themselves and others.
Moreover, the ECJ decision will also affect the cost of buying annuities. It was a a prevailing belief that women live longer than men, so their pension incomes were smaller than men. But the insurance industry decided to give same smaller pension income for men, bringing benefits in line with those for women. In the early 1990s, annuity rates are already down from around 18% and today it is close to 6%.
Thus the ECJ decision in gender ruling is going to hit UK insurance holders from Dec 21, 2012, in opting their car insurance and pensions.
This means that there would be no longer discrimination for men and women not only in car insurance, but also in life insurance, private medical insurance, pension plans and as well as the cost of buying annuities. This case was brought by the Belgian consumer association, saying that it is becoming difficult to set pricing structure for men and women based on their gender.
The gender ruling on unisex rates for car insurance could mean that insurance premiums for women under the age of 25 could increase by 25% and in some cases 50% for young drivers which could cost an extra £500- £1000, according to the British Insurance Brokers' Association. And the young men under the age of 25 would likely to see premium rates decreasing by an average of 10%, and in some cases 25%.
This gender ruling will affect not only UK insurance holders but also the insurance industry, because if young men premiums are artificially reduced, it could lead to more opting to choose powerful vehicles by men, thus reducing risk for themselves and others.
Moreover, the ECJ decision will also affect the cost of buying annuities. It was a a prevailing belief that women live longer than men, so their pension incomes were smaller than men. But the insurance industry decided to give same smaller pension income for men, bringing benefits in line with those for women. In the early 1990s, annuity rates are already down from around 18% and today it is close to 6%.
Thus the ECJ decision in gender ruling is going to hit UK insurance holders from Dec 21, 2012, in opting their car insurance and pensions.
No comments:
Post a Comment