The European Commission (EC), the European Union’s regulatory authority, has delayed plans to outlaw the use of gender to determine insurance premiums at least until December.
The controversial initiative, first proposed in December 2003, would have prohibited insurers from considering gender when setting insurance premiums. Paradoxically many consumer groups oppose the adoption of the non-discrimination rule, as they charge it would effectively raise premiums, especially on life and auto insurance, for women, who, at least in Europe, tend to be safer drivers than men, and tend to live longer as well.
The proposal has also been widely condemned by the insurance industry, as it would greatly hinder its ability to price premiums appropriately and as such, consumers would suffer from a blanket approach to premium pricing that would eliminate a salient variable in assessing risks.
The Association of British Insurers, the U.K.’s insurance trade association, commented: “We are encouraged to hear that the EU Council of Ministers has recognized the validity of gender as a factor in insurance, though it is disappointing that a final decision has been held over to December. The UK government has continued to support our views on the benefits of gender pricing for our customers and we hope that the issue will be settled in December.”
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