Basing insurance rates on statistics about the differing life expectancies or road accident records of men and women is standard practise across Europe.
It is specifically permitted in EU anti-discrimination rules which allows member states to discriminate on insurance rates and benefits \”if sex is a determining risk factor, and that can be substantiated by relevant and accurate actuarial and statistical data.\”
But an Advocate-General at the European Court of Justice has advised judges that the concession in the EU \”Gender Directive\” is countermanded by \”higher-ranking\” equality provisions set out in the Charter of Fundamental Rights in the Lisbon Treaty.
If that legal \”opinion\” is upheld in Tuesday\’s final verdict, it will mean insurers can no longer gender-based different prices on a range of products including car insurance, private medical insurance, pension schemes and annuities.
Don\’t you just love what the miserable little cock-suckers have done here?
Insurance rates are based upon reality: men die younger so get higher annuities, young men drive worse so pay higher car insurance. These two aspects of the universe, it\’s now (possibly) going to be illegal to acknowledge them.
And as for private medical insurance: are we to see men forced to buy cover for pregnancy and women for prostate exams?
I should, perhaps, note that there is a saving grace to this fuckwitted nonsense. It shows that the European Union really is a Babelian Tower of nonsense upon stilts, a direct rejection of Canute\’s lesson to the world that that real world is more powerful than the commands and desires of the rulers.
We learnt this a millennium ago: our Continental partners seem not to have done so as yet.
Fuck \’em, can we leave yet?
Well if this does happen then I’m looking forward to taking my full ?9 months of paternity leave. And being the best Briton in the Wimbledon women’s championship. And on into further insanity
OK, Tim – but don’t you then have to explain why discriminating by sex is OK but discriminating by race isn’t? And don’t “they” have to explain why still discriminating by age is OK?
Just a thought:
Is there any reason why an insurance company in China or the US couldn’t offer people cover for driving here?
And if the insurance and annuity community are forced to equalise the rates, we all know what’s going to happen… Women will get men’s car insurance rates and men will get women’s annuities.
Good time to buy insurance company shares mayhap? 🙂
How will that work in a competitive market, Pogo?
Well if this does happen then I’m looking forward to taking my full ?9 months of paternity leave.
Easy solution that doesn’t breach any discrimination rules: “in cases where there are two parents available, parental leave can be split between both parents according to their preference, with each partner taking a minimum of two weeks. Where one parent isn’t available/known/etc, the primary carer will be entitled to the full allowance”. Sorted.
From what I can tell, the only problem with the Lisbon Treaty here is that its poorly worded inasmuch as it states that:
“Equality between men and women must be ensured in all areas, including employment, work and pay.”
According to the explanatory notes to the treaty, this was intended to relate exclusively to equality in the workplace – its actually derived solely from employment directives.
Applying it to annuities and insurance polices would seem, therefore, to be a perverse interpretation of the intent of treaty, which is pretty much what I’d expect by way of an ECJ ruling in this matter.
The optimum solution here would seem to be that of:
a) throwing out the case with a flea in its ear, and
b) sacking the idiot advocate general responsible for the guidance to the court because they clearly haven’t got the first fucking clue what they’re on about.
Either way, its a lot of fuss about nothing as if a perverse ruling is handed down, all we need to do enter a precise worded derogation and, I suspect, wait in the queue with the other EU states who’ll be lining up to tell the ECJ ‘bollocks’.
@dearieme – Are you seriously suggesting that the insurance and annuity markets are “competitive”? 🙂
In any case, if companies aren’t allowed to bias their offers by sex and effectively have to offer a “unisex” rate they’re going to be obliged to pick the non-optimal rate for 50% of their customers at any one time.
They (presumably) operate at a profitable level at the moment but offering the other rate in either case will severely impact on that. I suppose that there’s a slight possibility that they’d set the new rates part-way between the existing two but I’d guess that the bean-counters would get very excited if 50% of the customer base was always showing a net loss.
Tim adds: Actually, yes, insurance is pretty competitive. We can tell this because rates have been rising strongly recently.
In the actual underwriting, insurers normally make a loss. They’re forced into this by hte press of competition among them. They make up this loss by the investment returns they get from having all those premiums to play with (the best way to look at a large insurance company is as a hedge fund that gets it’s money from premiums rather than investors). Investment returns have, as we know, been falling. So the premiums have to rise as there’s no more cross subsidy.
“@dearieme – Are you seriously suggesting that the insurance and annuity markets are “competitive”?
Of course they fucking are: do you live in North Korea? Arsehole.
@Tim: I hope you enjoyed my translation of your remark into the vernacular.
@Mr Almond – “Is there any reason why an insurance company in China or the US couldn’t offer people cover for driving here?” … ‘fraid so, you need to be licenced to issue a legal certificate of motor insurance in the UK.
You could perhaps make a contract with chinese company to insure you against own and third party losses incurred while driving, but the certificate they give you, no matter how good their faith, does not give you legal entitlement to drive on the public roads.
Pensions and life insurance may be different, I do not know.
But the government could presumably licence, for example, Direct Line Jersey or Aviva Guernsey to issue motor insurance certificates if it chose to?
A potential unintended consequence would be increased accident rates as the sex ratio will be further skewed towards (higher risk) male drivers compared to currently.
I don’t share Tim’s euroskeptic views, but mostly because it’s clear the EU doesn’t have a monopoly on making bad decisions. It is typical for the current notion of “equality” to look only at carefully-selected financial aspects of any deal rather than consider the whole. Sure, having both men and women paying, say, €500 each for their car insurance is “equality” for certain values of “equality”, but is it really “equality” if we consider that those individuals represent different risks (as they very obviously do)? To me the purpose of antidiscrimination legislation is just that. To stop discrimination. But we have to recognise that we can end up doing the exact opposite by not looking at the picture. Even then, if we don’t like discrimination between men and women on the basis of sex (and in general we don’t) then sure, we can ban such discrimination, but in preventing such discrimination we might (as here) actually reduce equality, for broader values of “equality” than merely financial. Again, it’s fine to advocate for that in a democratic, liberal society, as long as we recognise what we are doing and it’s not grossly unfair. And that’s what we have the court there to decide.
Finally, it’s very entertaining to see the equality boot on the other foot, as it were. I can’t wait for the commentariat’s response if this decision goes in the advocate’s favour.
Further, there could end up being a market for male annuities and female car insurance in the Channel Islands (or anywhere else non-EU) with the opposite genders based in the EU. Would be interesting at least!
After lots of consultation, the UK government voted for a rule – that charter – that flat banned discrimination between men and women. Discrimination just means different treatment. Tim touchingly believes the UK government on its own won’t vote for things he – or even we – find stupid. I think that’s naive at best. Is the rule itself silly? insurance companies already have public policy limits on what they can do (for example excluding pre-existing conditions or even testing for them) and life goes on. i suspect no-claims bonuses or discounts and other things will find a way to make this work out for teenage drivers, and there are lots of alternatives to annuities for old guys. Can we stop saying can we leave yet?
At the risk of being contrary, it is just possible that this will indeed be a storm in a teacup.
Insurance rates are indeed based on averages. In the first instance…. Once you have actually rolled your hot hatch into a ditch, you are no longer an average risk: you have actually had an accident at which point your premiums go through the roof: the insurance company isn’t then insuring the average driver with an average likelihood of rolling thier hot hatch into a ditch: you are a genuinely individually different risk.
So it’s the just the first x months until you have that accident that the insurance company loses in the higher premium.
Or have they been really really stupid?
@dearieme // Feb 28, 2011 at 2:42 pm
Sense of humour failure sweetie? 🙂
Tim – I’m aware of how the insurance market operates and also that it’s fiercely competitive – hence the “smiley” after the “competition” comment.
The gist of my comment was that if companies were forced to offer “unisex” rates women would lose out on insurance and men would lose out on annuities. It would be impossible to otherwise without going bust.
It’s a bloody stupid idea anyway – possibly almost enough to stir Actuaries into protest action. 🙂
Point of fact: young men are not worse drivers than young females. But they do do more riskier things more often.
Ithankyew