We are writing to update you on the Test Achats case,
which might be of interest to you and your firm.
Test Achats case
The European Court of Justice (ECJ) has finally announced that
it will deliver judgment in the Test Achats case
on 1 March 2011. This case challenges the legality
of an European Directive which permits insurers to use gender as a
risk factor when setting premiums and benefits under
policies.
Insurers fought hard for this derogation; it now seems to be
teetering on the brink. The Advocate General's opinion
(which was issued in September 2010) concluded that Article 5 (2)
of the Gender Directive (2004/113/EC) - which permits
insurers to charge different premiums and to provide different
levels of benefit to men and women provided that sex is a
"determining factor" in the assessment of risk
– was incompatible with the principle of equal treatment
under EU law and hence was unlawful. If the ECJ in turn follows the
Advocate General's opinion in making its final judgment, UK
insurers would no longer be allowed to use differential pricing of
insurance policies for men and women in comparable situations. That
would constitute a sea-change for insurance firms –
especially those which deal with products such as term life
insurance, critical illness insurance, annuity products and motor
insurance.
Whilst the Advocate General has suggested a three-year transition
period for adjusting to the new legal framework conditions and
adapting insurance products should her opinion be upheld, the FSA
has now indicated in a recent statement that firms are expected to
have plans in place to react to the ECJ judgment next month.
Once the ECJ judgment has been delivered, we will provide an
assessment of the judgment and its implications. Watch this
space.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 23/02/2011.
