An article relating to information regarding the likely changes to annuity rates as a result of the latest ECJ ruling that you may find of interest.

The ECJ Annuity Ruling

The ECJ has handed down its much awaited judgement in the Test-Achats case on sex discrimination and insurance premiums.

Initial reports show that it has followed the Advocate General’s opinion which was issued last September. The effect is that an insurer will not be able to take sex into account in setting either annuity rates or insurance premiums.

The ECJ’s decision means that the existing EU Gender Directive opt out clause (Article 5(2) of Directive 2004/113/EC), which permits insurers to discriminate on grounds of sex, ceases to have effect from 21 December 2012.

 From this it would appear that:

• There is now an end date for sex-based annuity purchases of 21 December 2012. This is likely to prompt a male annuity closing down sale in the run up to Christmas 2012.
• For women, in theory the opposite applies: all other things being equal, it should be better to wait until the December 2012 deadline has passed to buy an annuity.
• The opposite will apply to life cover: unisex life assurance rates should cut the cost of cover for men and increase it for women.