Europe's highest court bans gender discrimination in insurance

[jacquelope]

I'd be interested in seeing this come to America. Europe's high court is saying it is wrong to use statistics to brand someone by gender at birth; I strongly agree with this.

Overall this might hurt men more when it comes to comparing the discrimination in auto insurance rates versus health insurance rates but that's the consequences of equality. I'll pay higher health insurance rates if it is the result of not being pigeon-holed at birth into a lower or higher-risk status.

What I want to know is what's the difference between having gender discrimination in insurance and racial discrimination, if the latter weren't against the law? Both can be justified by cooked-up statistics passed off as rational actuarial analysis.


http://news.yahoo.com/s/ap/20110301/ap_on_bi_ge/eu_court_sex_discrimination

EU court bans insurance sex discrimination

By RAF CASERT, Associated Press – Tue Mar 1, 10:44 am ET

BRUSSELS – The European Union's highest court on Tuesday barred the insurance industry from charging different rates for men and women, saying the widespread practices amounts to sex discrimination against millions.

The ruling ordered changes effective Dec. 21, 2012, to auto insurance, life insurance, medical coverage and other plans, potentially affecting tens of millions of customers across the continent. For example, many women driver would see their car insurance costs rise even though they are considered safer on the road.

EU Justice Commissioner Viviane Reding said it was "now clear that an insurance company must not distinguish between women and men; all customers must be treated equally."

[ProgressiveProfessor]

1. This will work against women in terms of $$$

The actuarial soundness of the rate differentials is pretty strong. Its a green eye shade kind of thing and hard to cook. The decision to use it vs universal rates is a policy decision. We as nation have let them stay separate, the EU has now changed over to universal. In the end the numbers don't lie, it is just who pays the tab, in this case women who live longer so have lower life insurance rates. They also tend to have lower accident rates and lower car insurance as a result.

Interestingly enough, there is no rate differential in Social Security, but survivor benefits are only go to married couples and dependents. I expect to see some changes there soon.

[jacquelope]

2. What I want to know is...

is the European high court saying "you must judge people as individuals and not groups"?

If this is their reasoning then I agree.

[enlightenment]

3. I don't think so, since the general belief is that this will mean

a large spike in the rates for women. If they would base it on individuals instead of groups it would be a lot more fair, but I don't see it happening, in the EU or here.

[ProgressiveProfessor]

6. Insurance is based on sharing risk over a group, and it is the group factors that drive that

No one in insurance is looked at as a true individual, that is not how it works mathematically.

For example younger people have higher auto insurance and lower life and health insurance rates. Women tend to be lower in all three categories than men. That reflects those group histories. We can eliminate or add factors as society chooses, all it does is spread around who pays what piece of the bill. The overall bill remains the same.

[ProgressiveProfessor]

4. No, what it has said is that you can not factor gender into insurance rates

The concept of insurance is based on groups and shared risk. This changes the groupings that can be used in the EU. It does not remove other factors like health, driving record, age etc.

Do you want your insurance rate and the brand new 16yo boy with a brand new license to be the same? What groupings do you find acceptable? If the answer is none, then the rates would go up for most of us. Is that equitable? When taken to the macro level, the numbers are hard to fudge. The differences are which groupings we find acceptable.

[jacquelope]

7. OK so I kinda put that the wrong way.

My gripe is not so much the groups, since age is also a group, but rather the fact that when it comes to the gender group, you cannot change who you are. You're born male, or female. Your age changes, and you can even change your geographic location, but your gender (barring medical intervention) does not. Of course it's not fair to judge a 30 year old the same as a 16 year old but again a 16 year old does turn into a 30 year old if they don't die first.

Insurance is indeed based on groups and shared risk. Consequentially, how does discriminating on the basis of gender differ from discriminating on the basis of race? I'm quite sure if I dig up my old licensing training notes I could find the studies my instructor pointed me to about racial differences and its relation to "redlining". I believe the issue was even addressed by the Fair Housing Act or the Community Reinvestment Act, but again I lost my notes on that. (Boy, the net really sucks for doing REAL research on real subjects... I can find out about Charlie Sheen's latest screw-ups, but not this... *rolling eyes*)

[ProgressiveProfessor]

8. It really is a decision society has to make

Actuaries are soulless beings in green eye shades. They will cut the data based on whatever factors they are given; hair color, shoe size, or any other factor than can be measured. It really is society's call on what factors are acceptable. Women really do have less auto accidents and live longer than men. If society says that can not be factored in, then so be it.

I consider age as fixed as gender and race. Also insurance (and many other things) are already not allowed to be based upon race. I could go either way on gender due to social implications even though the basis for its use is solid. I believe that age should be factor to be considered.

[jacquelope]

9. They're always looking for new groups

Knowing insurance companies, these guys in Europe will no doubt look for new groups to penalize.

The one I hate the most, moreso than gender or race, is credit ratings. Actuaries say people with bad credit are more likely to cause accidents. That's almost as illogical as saying people who wear corduroys cause more accidents than those who wear denim. But don't let me get into that... aside from I'm glad using credit ratings to decide premiums is illegal here in California. Go, California!

(End off-topic rant)

[leftstreet]

5. !!

Interestingly enough, there is no rate differential in Social Security, but survivor benefits are only go to married couples and dependents. I expect to see some changes there soon.

I hadn't thought about that !!

[muriel_volestrangler]

10. No rate differential in SS, but the current difference in private pensions is also banned by this

The ABI said that under the new rules men approaching retirement could see an eight per cent reduction in annuity rates while rates for women approaching retirement could rise by six per cent.

So what women loose in car and life insurance, they may make up in a pension, if it's one you use to buy an annuity on retirement.