Pension providers may cut guarantee periods ahead of EU gender pricing ban
Pension providers are considering reducing the length of time for which an annuity quotation is guaranteed. This is because of the implementation of European rules that will ban gender pricing in insurance contracts.
In March last year, the European Court of Justice ruled gender pricing for insurance products will be banned from December 21, 2012 following advocate general Juliane Kokott's view that using gender as a risk factor when pricing insurance is discriminatory.
The decision will affect the way insurers price annuities, life insurance, income protection and critical-illness cover. Pension providers offer customers varying lengths of time for which an annuity quotation is guaranteed. Guarantee periods of 14 - 30 days would be typical. As gender-specific guarantee periods cannot go beyond December 21, providers might either introduce gender-neutral prices early or reduce the guaranteed quotation periods.