You may remember that in March last year we wrote an article on the European Court of Justice (ECJ) ruling that gender based pricing was incompatible with human rights.

In summary the decision meant that from 21^st December 2012, insurance underwriters would not be allowed to take gender into account when underwriting risk. This in turn will almost certainly make protection insurance and annuities more expensive.

This of course drives a coach and horses through the main principle of underwriting, which is that cost is determined on the basis of how likely it is that the event insured against will occur. Most affected will be life assurance, where women usually pay less than men because they live longer, annuities where they tend to get less for their money than men for the same reason and income protection where men pay less than women because statistically they are off work less through sickness.

It has recently been announced that The Treasury is consulting on how gender could still be used to help price insurance despite the European Court of Justice's ruling.

The government said it continued to believe the judgment, on direct gender-based pricing of insurance contracts, was detrimental to consumers, but was still obliged to implement it into law.

However, the consultation will examine how gender could be used as an actuarial factor in pricing insurance and annuities.

'There are... a number of legal issues around, in particular, the definition of a new contract and the circumstances in which it would remain open to insurers to make use of gender,' reads the consultation document.

‘The gender directive does not prohibit the use of sex as an actuarial factor; rather it says that this must not result in individual differences in premiums and benefits. This allows for the fact that insurers will need to collect data on gender and use it for the purposes of assessing the overall risk presented by a particular pool or pool of risks.’

Mark Hoban, the financial secretary to the Treasury, said: ‘While nobody should ever be treated unfairly because of their gender, financial services providers should be allowed to make sensible decisions based on sound analysis of risk.  We continue to work hard with other member states and the [European] Commission to secure legal certainty for industry and reduce any detrimental effects for consumers.'

The expectation is that whichever sex currently pays less, can expect to pay more in the future. But the way of the world is such that it does not necessarily follow that whichever sex currently pays more can expect to pay less. Once again we would like to reiterate the fact that Insurers are likely to be cautious and err on the side of overcharging rather than risk undercharging, until the dust has settled.

If you are considering retirement or increasing your life assurance then we urge you to get in contact sooner rather than later to discuss your options.