Insurance segmentation as unfair discrimination: what to expect next in the wake of Test-Achats

Abstract

The European Court of Justice has held that as from 21 December 2012 insurers may no longer treat men and women differently on the basis of their sex, thus prohibiting ‘gender-rating’ in insurance and related financial services throughout the European Union. In this article I look into the legislative and judicial processes leading up to this outcome as well as to the judgment itself in order to shed light on how the unisex rule came to be. I reflect upon what happened to sex as an actuarial factor and try to draw some conclusions on what the future might bring us, not only in the subject of sex discrimination but also taking into consideration the European Commission’s existing proposal on a similar directive touching upon the use of age and disability as actuarial factors. I conclude that although it is currently very difficult, perhaps impossible to provide an admissible justification for the practice of gender-rating, this does not mean that we should stop testing, as the premise on which the absolutist version of the unisex rule rest that gender-rating is always incompatible with the principle of non-discrimination has yet to be validated. I also conclude that there is good cause to believe that in the field of personal insurance age should continue to be used as a risk factor, but that some of the current practices involving both age and disability as risk factors might not pass the test of compatibility with the fundamental rights of the European Union.