Gender called into question as risk factor in insurance contracts

By Leo Gasteen

The sex of an insured person should not be taken into account as a risk factor in an insurance contract due its discriminatory nature on grounds of sex, according to the German Advocate General to the ECJ Juliane Kokott.

The Advocate General's opinion comes after the consumer organisation Association Belge des Consommateurs Test-Achats and two private individuals brought an action before the Belgian Constitutional Court for annulment of a Belgian provision transposing Directive 2004/113. Thereupon, the Belgian Constitutional Court asked the Court to rule on the compatibility of the derogation in Directive 2004/113 with higher-ranking law, namely with the principle of equal treatment for men and women under European Union law.

Directive 2004/113/EC prohibits discrimination on grounds of sex in the access to and supply of goods and services. It also, in principle prohibits sex from being taken into account as a factor in calculating insurance premiums. However, derogation exists which permits individual Member States to permit sex specific differences in insurance premiums, insofar that sex is a determining risk factor that can be supported by substantial statistical data.

The Advocate General discussed whether the positions in which men and women find themselves with regard to the determining risk factors in respect of insurance services may differ significantly legally. In that regard, the Advocate General was of the opinion that the exception in question does not relate to any clear biological differences between insured persons.

The Advocate General was of the opinion that many other factors also play an important role in the evaluation of insurance risks. Thus, the life expectancy of insured persons is above all strongly influenced by the economic and social conditions of each individual, such as, for example, the kind and extent of the professional activity carried out, the family and social environment, eating habits, consumption of stimulants and/or drugs, leisure activities and sporting activities.

The Advocate General concluded that the use of risk factors based on sex in connection with insurance premiums and benefits is incompatible with the principle of equal treatment for men and women under European Union law. She therefore proposed that the Court should declare the relevant derogating provision in Directive 2004/113 to be invalid.

Opinion of the Advocate General on Case C236/09 - Full text