A recent test case on sex discriminations for insurance premiums, in the European Court of Justice (EJC) recently ruled that from December 21st, 2012, insurers may no longer price their products based on gender. The existing European Union Gender Directive Opt-out Clause (Article 5[2] of Directive 2004/113/EC) that permits insurers to discriminate on grounds of gender will cease to have effect from that date.


Financial experts believe that this will have far reaching affects on anyone buying financial products in the future

The change in the law means that insurance companies will have to significantly change how they price annuities, life insurance and health insurance.

The end date for gender-based annuity purchases may well lead to a male annuity “closing-down sale” in effect, before the 21st December 2012. On the other hand women are likely to be advised to wait until after that date to purchase an annuity.

On the other hand Life Assurance Cover, unisex life assurance rates should lower the cost of cover for men, which is good news, but unfortunately increase the cost for women. This may lead to advisers recommending that the cost of life assurance is revisited in 2013.

The Association of British Insurers (ABI) has recently issued a statement to say that this news is “disappointing” and that “Each company will have to respond to the ban in the way they feel is in their customers’ interests”.

Additionally the ruling is expected to have a knock-on effect on the rates at which men can take income from Drawdown (Pension Drawdown) because the rates used broadly reflect current annuity rates. This will almost certainly prompt another review of the newly issued HMRC/GAD drawdown tables.

Midlands Investment Agency will be keeping a track of further developments with regard to Unisex life assurance rates.