On the 8 December 2011, the UK government published a consultation paper on its proposed approach to implementing the European Court of Justice’s EU Gender Directive ruling into law and its views on how insurers can use gender as a risk factor in the light of the judgment.

In March, the ECJ ruled that use of gender as a risk factor by insurers should not result in individual differences in premiums and benefits for men and women, with effect from 21 December 2012.

“Although the paper sets out a detailed assessment of the likely market reaction, the assessment itself is based on very limited sources of data,” says Cherry Chan, associate, Barnett Waddingham. “Given that there are multiple factors including human behaviour and economic downturn, it is very difficult to predict precisely how it may impact consumers apart from being in large part negative. This in turn makes the impact on the industry difficult to quantify.

“The government proposes minimal changes to the current regulations which we believe will make for an easier transition for the industry; however, we believe that the industry would welcome further guidance from HM Treasury.”

The consultation paper contains the draft regulations proposed by the government, along with an impact assessment on consumers and industry.
Finally, it seeks views on:

•whether the impact assessment, and the underlying assumptions, are reasonable;
•the scope of the draft regulations;
•collection of data and use for purposes of assessing overall risk;
•definition of new contract; and
•group insurance schemes.

The consultation closes on 29 February 2012.

Share Story: