13.1.2012   

EN

Official Journal of the European Union

C 11/1

1.

Article 5 of Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services (1) (hereinafter ‘the Directive’) regulates the use of actuarial factors related to sex in the provision of insurance and other related financial services. Article 5(1) provides that, for new contracts concluded after 21 December 2007, the use of sex as an actuarial factor in the calculation of premiums and benefits must not result in differences in individuals’ premiums and benefits (hereinafter ‘the unisex rule’). Article 5(2) provides for derogation from this rule by allowing Member States to maintain proportionate differences in individuals’ premiums and benefits where the use of sex is a determining factor in the assessment of risk based on relevant and accurate actuarial and statistical data.

2.

In a judgment delivered on 1 March 2011 (2) (hereinafter ‘the Test-Achats ruling’), the Court of Justice of the European Union (hereinafter ‘the Court of Justice’) declared Article 5(2) invalid with effect from 21 December 2012. The Court of Justice considers that by enabling Member States to maintain without temporal limitation an exemption from the unisex rule laid down in Article 5(1), Article 5(2) runs counter to achievement of the objective of equal treatment between men and women in relation to the calculation of insurance premiums and benefits, which is the purpose of the Directive as defined by the legislature in the insurance field, and is therefore incompatible with Articles 21 and 23 of the Charter of Fundamental Rights of the European Union.

3.

All Member States currently allow gender differentiation for at least one type of insurance. In particular, in all Member States, insurers are allowed to use sex as a risk-rating factor in life insurance (3). The Test-Achats ruling will therefore have implications in all Member States.

4.

The present guidelines aim to facilitate compliance with the Test-Achats ruling at national level. However, the Commission’s position is without prejudice to any interpretation the Court of Justice may give to Article 5 in the future.

5.

As from 21 December 2012, the unisex rule contained in Article 5(1) must be applied without any possible exception in relation to the calculation of individuals’ premiums and benefits in new contracts.

6.

In the Test-Achats ruling, the Court of Justice concludes that Article 5(2) of the Directive ‘must therefore be considered to be invalid upon the expiry of an appropriate transitional period’ ending on 21 December 2012 (4). This means that from that date the requirements of Article 5(1) must be applied without derogation.

7.

The transitional period needs to be interpreted in line with the objective of the Directive as expressed in Article 5(1), which provides that the unisex rule shall only apply to new contracts concluded after the deadline for transposition of the Directive on 21 December 2007. As explained in recital 18 of the Directive, the objective of this rule is to avoid a sudden readjustment of the market. The Test-Achats ruling does not change this objective, nor does it have an impact on the applicability of the unisex rule only to new contracts as laid down in Article 5(1). The Test-Achats ruling means that for new contracts concluded as from 21 December 2012 this rule has to be applied without any exception, owing to the invalidity of Article 5(2) from that date.

8.

It is settled case law that the need for uniform application of European Union law and the principle of equality require that the terms of a provision of European Union law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an independent and uniform interpretation throughout the European Union (5).

9.

The Directive does not define the concept of a ‘new contract’, nor does it contain any reference to national laws as regards the meaning to be applied to such terms. This concept should therefore be regarded, for the purposes of application of the Directive, as designating an autonomous concept of European Union law which must be interpreted uniformly throughout the Union. This uniform interpretation corresponds to the aim of the Directive in the insurance field, which is to implement the unisex rule, after the expiry of a transitional period. The concept of a ‘new contract’ referred to in Article 5(1) is essential for the practical implementation of this provision. Diverging interpretations of this concept based on national contract laws would create a risk of different transitional periods delaying the comprehensive application of the unisex rule and also of an uneven playing field for insurance companies. This would undermine the objective pursued by the Directive of comprehensively guaranteeing the equal treatment of women and men across Member States in relation to individuals’ insurance premiums and benefits from the same date as expressed in its Article 5(1) (6).

10.

The implementation of Article 5(1) requires a clear distinction between existing and new contractual agreements. The distinction must meet the need for legal certainty and be based on criteria that avoid undue interference with existing rights and preserve the legitimate expectations of all parties. This approach is in line with the Directive’s objective of preventing a sudden readjustment of the market by restricting the application of the unisex rule only to new contracts.

11.

Accordingly, the unisex rule pursuant to Article 5(1) shall apply whenever (a) a contractual agreement requiring the expression of consent by all parties is made, including an amendment to an existing contract and (b) the latest expression of consent by a party that is necessary for the conclusion of that agreement occurs as from 21 December 2012.

12.

Consequently, the following (7) should be considered as new contractual agreements, having therefore to comply with the unisex rule:

13.

On the contrary, the following situations (9) should not be considered as constituting a new contractual agreement:

14.

Article 5(1) prohibits any result whereby differences arise in individuals’ premiums and benefits due to the use of gender as a factor in the calculation of premiums and benefits. It does not prohibit the use of gender as a risk-rating factor in general. Such use is allowed in the calculation of premiums and benefits at the aggregate level, as long as it does not lead to differentiation at individual level. After the Test-Achats ruling, it therefore remains possible to collect, store and use gender status or gender-related information within those limits, i.e.:

—   reserving and internal pricing: insurers remain able to collect and use gender status for internal risk assessment, notably to calculate technical provisions in line with insurance solvency rules and to monitor their portfolio mix from an aggregate pricing perspective.

—   reinsurance pricing: reinsurance contracts are contracts between an insurer and a reinsurer. It remains possible to use gender in the pricing of these products, as long as they do not lead to gender differentiation at individual level.

—   marketing and advertising: pursuant to Article 3(3), the Directive does not apply to the content of media and advertising, and Article 5(1) only addresses the calculation of individuals’ premiums and benefits. It therefore remains possible for insurers to use marketing and advertising to influence their portfolio mix, e.g. by targeting advertising at either men or women. However, insurers may not refuse access to a specific product because of a person’s sex, unless the conditions of Article 4(5) are met (12).

—   life and health underwriting: the unisex rule means that premiums and benefits cannot be different between two individuals for the same insurance policy simply because their gender is not the same. There are however other risk factors, e.g. health status or family history, on the basis of which differentiation is possible and for the assessment of which insurers need to take gender status into account, in light of certain physiological differences between men and women (13).

15.

The Commission also considers that, under the conditions of Article 4(5) of the Directive, it remains possible for insurers to offer gender-specific insurance products (or options within contracts) to cover conditions which exclusively or primarily concern males or females (14). This possibility is however excluded for pregnancy and maternity, in light of the specific solidarity mechanism created by Article 5(3).

16.

The Test-Achats ruling only addresses the use of gender as a risk-rating factor and not the admissibility of other factors used by insurers. However, pursuant to Article 2(b) of the Directive, indirect discrimination occurs where an apparently neutral risk factor puts persons of one sex at a particular disadvantage. In contrast to direct discrimination, indirect discrimination can be justified if the aim is legitimate and the means of achieving it are appropriate and necessary.

17.

The use of risk factors which might be correlated with gender therefore remains possible, as long as they are true risk factors in their own right (15).

18.

The Test-Achats ruling only addresses the use of the gender factor in a context where the respective situations of men and women were found comparable by the legislature. It does not affect the use of other risk-rating factors, such as age and disability, which is currently not regulated at EU level.

19.

In the Test-Achats ruling, the Court of Justice points out that ‘(…) the principle of equal treatment requires that comparable situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified’ and that ‘the comparability of situations must be assessed in the light of the subject-matter and purpose of the EU measure which makes the distinction in question (…)’ (16).

20.

The use of age and disability would continue to be allowed under the proposal for a directive on implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation (17), as it would not be considered discriminatory. Where the legislator provides that, under certain conditions, a specific practice is not discriminatory, it does not create a derogation from the principle of equal treatment of comparable situations (which could only be admissible for a transitional period). It rather complies with the principle of equal treatment by recognising that the situations at issue are not comparable and should be treated differently (or that, in spite of comparability, there is an objective justification for treating them differently).

21.

Some insurance products, such as annuities, contribute to retirement income. The Directive however only covers insurance and pensions which are private, voluntary and separate from the employment relationship, employment and occupation being explicitly excluded from its scope (18). Equal treatment of women and men in relation to occupational pensions is covered by Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) (19).

22.

Some occupational pension schemes provide for the payment of a benefit under a specific form, such as annuities. Where that is the case, the scheme in question will fall under Directive 2006/54/EC even if it relies on an insurer to pay out the benefit. On the contrary, if the individual employee has to conclude an insurance contract directly with the insurer without involvement of the employer, for example to convert a lump sum into an annuity, the situation will fall within the scope of the Directive. Article 8(1)(c) of Directive 2006/54/EC specifically excludes from its scope insurance contracts concluded by workers and to which the employer is not a party.

23.

Article 9(1)(h) of Directive 2006/54/EC allows for the setting of different levels of benefits between men and women when justified by actuarial calculation factors. The Commission considers that the Test-Achats ruling has no legal implications for this provision, which applies in the different and clearly separable context of occupational pensions and which is also drafted in a very different way from Article 5(2) of the Directive. Indeed, under Article 9(1)(h) of Directive 2006/54/EC, the setting of different benefits for men and women is not considered discriminatory when justified by actuarial data.

24.

Member States have to draw the consequences from the Test-Achats ruling and adapt their legislation before 21 December 2012 in order to guarantee the application of the unisex rule by insurers as required by the judgment. The Commission will monitor the situation, ensuring that, after that date, national legislation in the field of insurance is fully in compliance with the ruling on the basis of the criteria set out in the present guidelines.

25.

The Commission would like to encourage a competitive and innovative industry such as the insurance sector to make the necessary adjustments and offer attractive unisex products to consumers without an unjustified impact on the overall price levels. The Commission will remain vigilant in following the evolution of the insurance market in order to detect any unjustified rise in prices attributed to the Test-Achats ruling, including in light of the tools that are available under competition law (20) in the event of alleged anti-competitive conduct.

26.

The Commission will report on the implementation of the Test-Achats ruling in national law and in insurance practice in 2014, in the context of a more general report on the implementation of the Directive.