EU Bans Insurer Price Discrimination Based on Gender

Cite this Article
Joshua D. Wright, EU Bans Insurer Price Discrimination Based on Gender, Truth on the Market (March 01, 2011),

From the WSJ:

The European Union’s highest court declared illegal the widespread practice of charging men and women different rates for insurance, roiling the industry and setting in motion an overhaul of how life, auto and health policies are written across Europe.Two Belgian men had challenged the higher life-insurance premiums charged to members of their sex, arguing that it was discriminatory. In a ruling Tuesday, the Luxembourg-based European Court of Justice agreed.   The judgment cannot be appealed.  It will have vast implications: Insurers routinely charge women, who live longer, lower premiums for life insurance and smaller sums for annuities; male drivers, who statistically cause more accidents, pay higher premiums for auto policies.


Insurers, she wrote, were using sex as a sort of convenient shorthand for underlying causes of longevity or risk—such as propensity to engage in dangerous behavior, eating and drinking habits, and so on. That sex is far easier to identify than many—or perhaps all—of these characteristics is no excuse, she argued, for violating the nondiscrimination principles.

Thus, more indirect and less efficient forms of price discrimination are OK.  It is unclear whether the Court considered whether prohibiting price discrimination would impose costs upon the “discriminated” against group, i.e. in this case, women.