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The Actuary The magazine of the Institute & Faculty of Actuaries

Sex discrimination compromise

A European Union council of ministers gave preliminary approval to an EU directive that would ban the unequal treatment of citizens based on gender – a directive that had raised the ire of insurance industry groups that argued banning the use of sex in certain underwriting decisions would drive up the cost of insurance for all.

But the draft nearly approved by the EU Council for Employment and Social Affairs contained modified language on the insurance aspect of the proposal that insurance groups say is an effective compromise on the sex issue. The Comité Européen des Assurances (CEA), a Paris-based federation of European insurers and reinsurers, said the compromise in the language of the proposal would give member states of the EU room to allow the use of sex as a pricing factor.

‘We have repeatedly warned that a ban on the use of gender, although laudable at first sight, could result in higher insurance premiums for all consumers’, said CEA director-general Daniel Schante in a statement. ‘The compromise clearly shows that the industry’s arguments have been retained by a number of governments.’

The Council for Employment and Social Affairs said that under the compromise version of the directive, ‘equal treatment is the guiding principle to be applied’, although ‘a number of exceptions are provided for under specific conditions’. The council said in a statement that member states may permit ‘proportionate differences in individuals’ premiums and benefits’ where the use of sex is a determining factor in the assessment of risk.

‘Any different treatment has to be based on relevant and accurate actuarial and statistical data that has to be made public and regularly updated’, the council said in a summary of its 4 October deliberations on the proposal. ‘The use of these exceptions is subject to review by both the member states and the [European” Commission.’