Swiss Re response to EC guidelines on gender ruling

Guidelines and clear comments from the governing body welcomed, but the insurance industry should still recognise the social concerns which led to the Directive being challenged.

On 22 December 2011, The European Commission adopted guidelines to help the insurance industry implement unisex pricing. This is in response to the European Court of Justice (ECJ) ruling that article 5(2) of the Gender Directive would be invalid with effect from 21 December 2012. The ruling had left a number of issues unclear and the industry urgently sought clarification.

Swiss Re and the CEA have been actively campaigning for these guidelines to ensure that many essential gender linked insurance practices can continue. In summary the key points are:

  1. Only new contracts concluded from 21 December 2012 are affected, with policies concluded before that date remaining on the original agreed terms.
  2. Insurers may continue to use gender for internal reserving to ensure the sustainability of the aggregate price offered.
  3. Reinsurance pricing may continue to use gender as long as the final price offered to the public by the insurer is on an aggregate basis.
  4. Marketing and advertising activities by insurers may target one sex only, as long as insurers do not refuse access to a specific product because of a person’s sex.
  5. Life and Health underwriting of individual risks may continue to reflect the different risk factors (eg health status or family history), taking sex into account in light of the physiological differences between genders.

Swiss Re welcomes these guidelines, especially the last which had been subject to the most speculation and varied interpretations within the industry. Swiss Re also welcomes the very clear comments that the use of age and disability as differentiation factors should not be regarded as discrimination under the pending anti-discrimination directive.

These guidelines should now be used by each Member State in implementing the ECJ ruling into national law. Swiss Re encourages national insurance associations to ensure the use of gender as described in the guidelines is protected under any revision, or new law, adopted at Member State level.

There is still a challenge to ensure aggregate pricing is in place by the December 2012 deadline, but the guidelines are a positive development. It is important, however, that the industry recognises the social concerns which led to the Gender Directive being challenged. The industry should continue to educate the public and regulators on the importance and social benefits of differentiation in terms of affordability and access to private insurance solutions.

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Published 29 December 2011

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