Insurance: Gender Discrimination

Debate between Lord Gordon of Strathblane and Baroness Verma

Tuesday 8th March 2011 Lords Chamber

[Lord Gordon of Strathblane]

To ask Her Majesty’s Government whether they intervened in the case before the European Court of Justice on gender discrimination in insurance policies and annuities.

[Baroness Verma]

My Lords, the UK Government, along with a number of other member states, the European Council and the Commission made oral and written representations to the European Court of Justice during legal proceedings. The representations argued that, rather than preventing true equality, the article in question ensured that different cases could be treated differently, thereby ensuring true equality. However, the court has ruled that the practice of using gender as a factor in the calculation of premiums and benefits must cease, with effect from 21 December 2012.

--- Later in debate ---

[Lord Gordon of Strathblane]

I thank the Minister for that reply, and I sense that she was as unhappy with it as I and, I suspect, most of the House will be. The problem is that article 5.2 of the gender directive, as the Minister indicated, allowed an opt-out where there was clear, up-to-date statistical evidence that gender was a major risk factor in insurance. That evidence still exists. It is a fact that women tend to live longer than men, yet an insurer is required by the court to ignore that in computing either insurance premiums or annuity rates. Does the Minister agree that it is likely that all of us will be worse off, because a sensible and prudent insurer must provide for the worst-case scenario and cannot predict whether the uptake will be mainly male or female? What steps are the Government taking to remedy this situation, bearing in mind, as she said, that we are not alone? Indeed, the European Commission itself intervened in the case.

[Baroness Verma]

My Lords, the noble Lord has referred to a number of very difficult decisions that had to be taken. We are disappointed by the ruling. The previous Government made written representations and we made oral representations, but the judges unfortunately decided that by 21 December 2012 it will be illegal to discriminate on the basis of gender. It is clearly undesirable to treat people unfairly because of their sex. However, financial services providers will be allowed a period in which to make the changes. We are encouraged that people have supported our drive for equality. Unfortunately, things such as this make our task much more difficult. I am pleased to say that the insurance industry has adopted a can-do attitude to this ruling, and I am sure that we will do our very best as a Government to assist it.