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ECJ test- ACHATS decision

AUTHOR(S): Sharon Daly, Darren Maher
PRACTICE AREA GROUP: Insurance and Reinsurance
DATE: 04.03.2011


The European Court of Justice (the “ECJ”) has held that Article 5(2) of the European Gender Directive (2004/113/EC) will be invalid from 21 December 2012, on the basis that it is contrary to the EU’s fundamental principle of equal treatment between men and women.

Article 5(2) allows Member States to permit insurers to use gender as a determining factor in the calculation of premiums and benefits, provided that such practice can be substantiated by relevant and accurate actuarial and statistical data.

The ECJ’s ruling will have wide reaching effects. Those Member States that have to date made use of Article 5(2) of the Gender Directive will have to amend their domestic laws so that all future insurance premiums and benefits are gender neutral. It is likely insurers will have to reassess the basis of their insurance premium pricing structures during the transition period to ensure compliance with the ECJ’s judgment.


In June 2008 an action was brought before the Belgian Constitutional Court seeking to annul a provision of a Belgian law which gives effect to Article 5(2).

The Belgian Constitutional Court referred the question of validity of the Article 5(2) to the ECJ in light of the fundamental principle of equal treatment between men and women across the Member States of the European Union.

It is on this issue that the ECJ handed down its judgment on 1 March 2011.


The ECJ considered the formal Opinion of Advocat General Juliane Kokott before handing down its judgment in this case. The Advocat General had opined that Article 5(2) was incompatible with the fundamental principle of equal treatment between men and women and should accordingly be declared invalid.

The Advocat General had stated that, save in certain exceptional cases relating to members of a disadvantaged group, direct discrimination on grounds of gender is only permissible if it can be established with certainty that there are relevant differences between men and women which necessitate such discrimination. The Advocat General was of the opinion that no such certainty exists where insurance premiums are calculated solely on the basis of statistics in respect of men and women.

The Advocat General did acknowledge that while the changes she was recommending might result in increased premiums for a proportion of people, this did not, in her view, constitute a material reason for making discrimination on grounds of gender permissible.


The ECJ concurred with the Advocate General’s Opinion in holding that Article 5(2) is invalid.

The ECJ noted that at the time the Gender Directive was adopted, the use of actuarial factors relating to gender was widespread in the provision of insurance services. The ECJ considered that as such it was permissible for the EU legislature at the time to implement the rule of unisex premiums and benefits on a gradual basis.

The ECJ noted, however, that the Gender Directive is silent as to the length of time during which the differences permitted under Article 5(2) may continue to be applied. This means that Member States, including Ireland, which chose to incorporate Article 5(2) into their respective national legislative framework are permitted to allow insurers to apply unequal treatment between men and women without any temporal limitation.

The ECJ held that Article 5(2) was, therefore, invalid with effect from 21 December 2012. From that date onwards, insurers will be obliged to apply unisex premiums and benefits. While the ECJ did not expressly address the treatment of existing insurance contracts, it should be noted that the Advocate General opined that with respect to existing contracts discrimination on the basis of gender in relation to premiums and benefits should be discontinued from the expiry of the transitional period.

There is no right of appeal against the judgment of the ECJ.



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