[Brussels, 02 March 2011] The European Court of Justice (ECJ) yesterday delivered its ruling in the Test-Achats case (C-236/09) concerning sex discrimination in insurance premiums. The EU’s highest Court ruled that different insurance premiums for women and men are not compatible with the EU’s Charter of Fundamental Rights. Member States are not allowed to derogate from the principle of equality between women and men in their national legislation. The ‘opt out’ clause in the Council’s Directive 2004/113 on gender equality in access to and supply of goods and services is thus illegal. As of 21 December 2012, no further differentiations in insurance premiums and benefits for women and men will be permitted in the EU.
The European Women’s Lobby (EWL) and AGE Platform Europe, who partnered up with the Belgian consumers’ organisation Test-Achats in the context of the adoption of the Directive, are delighted at the result: ‘This ruling, which confirms that there can be no exceptions to fundamental rights in the EU, is a victory for fairness, common-sense, solidarity and the rule of law’, says Alexandra Jachanova Dolezelova, EWL Vice-President. ‘We expect it to have substantial direct and indirect impacts on the quality of women’s lives in Europe.’
A more just assessment of risk and distribution of costs and benefits
Commenting on the media attention given to the changes in rates for car insurance, Ms. Jachanova Dolezelova denied that there would necessarily be a negative impact on women’s premiums in the long run, noting that premiums based on the objective criteria of past involvement in accidents would continue to reward safe drivers.
The EWL, AGE and Test-Achats had insisted on this point of ‘determining factors’ in a joint statement published in July 2009: ‘We feel in particular that the use of sex as a basis for the calculation of premiums should be forbidden – as is the criterion of race – since these factors are beyond the control of the individual concerned’, read the contribution. They added that there are other factors linked to lifestyle that play a more important role, such as smoking, alcohol consumption, stress factors and health awareness, which might be considered legitimate factors in risk assessment.
The associations insist that the claims made by insurance companies that costs would rise across the board, for both women and men, are illogical and unfounded. ‘This ruling only means a redistribution of the costs and benefits of insurance services, and consumers should be on guard against insurers using the legislation as an excuse to raise average premiums’, warns Cécile Gréboval, Programme Director at the EWL.
A step in the right direction towards ending the gender pensions gap
According to Anne-Sophie Parent, Secretary General of AGE Platform Europe, the ruling is particularly important to ensure women’s basic rights in a context of an ageing population and increasing pressure on state pension systems: ‘At the moment in the EU, women are offered much less favourable conditions in private pension schemes compared to men. With this ruling, private pension and savings schemes will have to comply with the principle of gender equality in the same manner as state schemes.’
Discrimination based on sex in insurances, along with a pay gap averaging 17.6% and substantial savings gaps due to women spending long periods outside the labour market for unpaid care work, has resulted in a situation where 21% of women aged 65 and over live in poverty. Recent research in the UK found that women’s retirement savings were on average 2/3 those of their male counterparts.
The end of exceptions to EU gender equality provisions?
According to the ECJ judgment, when the EU undertakes action to eliminate inequalities and to promote equality, as provided for by Article 8 TFEU, this action ‘must contribute, in a coherent manner, to the achievement of the intended objective’. In addition to ruling the sex discrimination in insurances incompatible with the provisions of the European Charter of Fundamental Rights, the ECJ also stated that the exception ‘work[ed] against the achievement of the objective of equal treatment between women and men, which is the purpose of Directive 2004/113’. The ruling could therefore justify challenges to the two other principal exceptions to the Directive designed to combat discrimination based on sex in the access to and supply of goods and services, which concern the fields of education and the media. ‘We have always maintained that the exclusion of education and media from the scope of this legislation is an anomaly which is contrary to EU Primary Law’, says Cécile Gréboval. ‘Now that the ECJ has confirmed that such exceptions cannot be justified, we are confident that legislation and practices affecting these two sectors which are central to achieving equality between women and men will soon change for the better.’