For many years it has been accepted that it is a fundamental right that men and women are equal. This rule is embodied in most European Legislation. However, one area where this principal has been suspended is in the area of the supply of goods and services and especially insurance products. In a recent ground breaking decision of the European Court of Justice (ECJ) even the area of insurance has come under scrutiny. As a result of the decision, woman can no longer be given better terms of insurance than men simply because they are women despite the stats that suggest women are better drivers and live longer.

The law that previously allowed a difference to be made between men and women was found in Article 5(2) of the Council Directive 2004/113/EC. Article 5(2) allowed the fundamental right of equality between the sexes to be suspended when it came to calculating risk for the purpose of insurance premiums. After all, women are safer drivers and surely entitled to lower premiums. When it comes to life insurance, it not right that as women tend to live longer they should pay less per month? Well not anymore.

The ECJ considered that Article 5(2) was inconsistent with other European laws on fundamental rights. Insurers have until December 2012 to correct the way they assess risk. For short term insurances such as car insurances this ought not to be too much of a problem but it is in the area of life insurance that insurers are going to have to think carefully. As a result women"s premiums are likely to go up despite the fact that on average this will mean women pay more for their insurance over the period of their lives.

Fraser Brown"s employment team can advise on issues of equality in employment. The Dispute Resolution team can advice on issues concerning the sale and supply of goods and services. We are also happy to recommend an Independent Financial Advisor for all your insurance enquiries.