On 22 December 2011, the European Commission adopted guidelines (the "Guidelines") to assist the insurance industry in implementing unisex pricing, following the ban on the use of gender as a factor in assessing risk and determining the benefits applicable in an insurance policy as a result of the ruling in the Test-Achats case.

In its ruling on the Test-Achats case on 1 March 2011 (see link to our case note here), the European Court of Justice gave insurers until 21 December 2012 to treat individual male and female customers equally in terms of insurance premiums and benefits.

Following consultations with European governments and stakeholders, the Guidelines clarify a number of matters, one of which is that that the ruling applies only to 'new contracts', in particular to contracts concluded after 21 December 2012. The Guidelines do not, however, limit what constitutes a 'new contract' and the Guidelines provide examples of what is considered a 'new contract' to ensure a comprehensive application of the unisex rule at EU level. Of note is that agreements, concluded as from 21 December 2012 which are intended to extend contracts concluded before that date (which would otherwise have expired) are 'new contracts'.

In addition, the Guidelines provide examples of gender-related insurance practices which are compatible with the principle of unisex premiums and benefits and, therefore, will not change because of the Test-Achats ruling. These practices are very diverse, ranging from the calculation of technical provisions to reinsurance pricing, medical underwriting or targeted marketing.

The Commission also recognises that gender is a determining risk-rating factor for at least three main product categories: motor insurance, life insurance/annuities and private health insurance. In all three categories, the Commission sees it as likely that a transition towards unisex pricing will have consequences on premiums and/or benefits at the individual level for men and women. As a result and depending on the product concerned, the Commission has warned that premiums might increase or decrease for certain categories of consumers.

Full details of the Guidelines can be found at: http://ec.europa.eu/justice/gender-equality/files/com_2011_9497_en.pdf

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