Has the ECJ gone too far with it’s ruling on insurance premiums?

3 March 2011

With the decision earlier in the week in relation to car insurance in Belgium, ruling that it is unlawful to differentiate between male and female applicants in the setting of premiums, has not the European Court of Justice gone too far on this occasion?

One has to ask what the decision actually does for the cause of equality? Surely insurers should be allowed to do their work in setting premiums as accurately as possible relative to the risks they are being asked to take on board, without legal decisions of this nature creating artificial distortions and playing havoc with their analysis. And are women not now going to be suffering every bit as men? – such as in having to pay more by way of car insurance premium, not because their risk profile merited it, but because for reasons of equality the premium should take into account risk profile for males of their own age as well

Doubtless, this is all grist to the Government’s mill in arguing that we cannot allow our legal and business affairs to be affected by a court in a far-flung part of the European Empire. Surely there are better ways of ensuring fairness and equality in the work place and in society than going off on a tangent over car insurance like this?

We faced a similar issue in the field of age discrimination until very recently. Employers were saying they would be quite happy to employ the over 65’s – but if they did, how would they deal with insured benefits such as health and life insurance, the cost of which would naturally rise on account of their age? It should not be unlawful age discrimination to reflect the fact that the over 65’s would be a more expensive risk to insure than youngsters. That was not discrimination as such, but cold hearted financial and statistical analysis. The result was a recent Government move to introduce an exemption into the Regulations so that when the default retirement age comes to an end employers will not be liable if they differentiate between staff simply on this one basis.

The Government should look again at the position on car insurance in the same light.

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