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Wednesday, January 05, 2005

Commission Backtracks on Idiocy

Under a proposal from the commission last year, that could only have come from a lost 68 generation fool, insurance companies were to be banned from offering different rates to men and women. Reality was not to be allowed intrude on this work of genius. It seems however that wiser heads have prevailed. Or as they say in Brussels, they lobbied us very effectively.
Controversial EU gender laws which would have forced insurance companies to abandon sex as a factor when calculating policy premiums, have been dropped by the European Commission.
Defending against the onslaught of Brussels stupidity is of course easier when, A) You know what is coming. B) You have money to lobby effectively.
We are rather satisfied with the outcome and that the European Commission recognised our arguments," said Lucia Caudet from the European Federation of National Insurance Associations.
For the rest of us, we are stuck with whatever Brussels throws at us. Besides, I don’t even see this as particularly victorious on the part of the insurance industry. The EU can only ever be slowed down it cannot be stopped.
Under proposals adopted by national governments before Christmas, insurance companies will be allowed to continue using sex for premium pricing if it can be shown with statistical, actuarial evidence that gender is a decisive factor in assessing risk.
So an insurance company is basically guilty unless it can prove its innocence. As premiums are set in relation to market competition, the very fact that prices are different is proof enough that the associated risks are different. Otherwise the opportunities for arbitrage would be huge. So there you have it. Even when you win, you lose.

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