Women drivers and the elderly are set to be charged much more for their car insurance after the European Court of Justice ruled that risk assessment could not be based on gender or life expectancy.
The move could spell the end of niche companies such as Sheilas Wheels, an insurance firm whose slogan is "designed with women in mind" and which heavily promotes itself with singing women and a profusion of pink.
Firms catering for older drivers, such as the insurance arm of Saga, will also be forced to remove their lower premiums.
However, the ruling is also likely to mean male "boy racers" will see their insurance payments drop, which is likely to lead to criticism from road safety groups.
The Conservative MEP Sajjad Karim condemned the decision as "utter madness" and a "setback for common sense".
One outcome which is more likely to be generally welcomed is that the finding means women's pension schemes will be placed on an equal footing with men's and will therefore be worth more, in most cases.
The court, which is based in Luxembourg, ruled that using differences between men and women as a risk factor in setting premiums for car and medical insurance and pension schemes breached EU rules on equality.
The verdict - which applies from December 21 2012 - will force changes in the current standard practice across Europe of basing insurance rates on statistics about differing life expectancies or road accident records of the sexes.
The Association of British Insurers estimated that the decision will actually reinforce price discrimination, with women drivers under 26 in the UK facing a 25% rise in car insurance rates, with a 10% drop in rates for fall for men.
Until now, discrimination in setting insurance rates has been explicitly permitted under EU equal treatment rules, "if sex is a determining risk factor... substantiated by relevant and accurate actuarial and statistical data".
But today the judges followed advice from the court's Advocate-General that "higher-ranking" equality provisions set out in the Charter of Fundamental Rights of the Lisbon Treaty must now apply.
Insurance companies can carry on discriminating between the sexes until December next year - the time when current EU equality rules are due to be reviewed.
The delay will also give insurance companies and risk assessors time to change the template for risk assessment by ignoring traditional statistical gender-based evidence.
The verdict - which applies from December 21 2012 - will force changes in the current standard practice across Europe of basing insurance rates on statistics about differing life expectancies or road accident records of the sexes.
The Association of British Insurers estimated that the decision will actually reinforce price discrimination, with women drivers under 26 in the UK facing a 25% rise in car insurance rates, with a 10% drop in rates for fall for men.
Until now, discrimination in setting insurance rates has been explicitly permitted under EU equal treatment rules, "if sex is a determining risk factor... substantiated by relevant and accurate actuarial and statistical data".
But today the judges followed advice from the court's Advocate-General that "higher-ranking" equality provisions set out in the Charter of Fundamental Rights of the Lisbon Treaty must now apply.
Insurance companies can carry on discriminating between the sexes until December next year - the time when current EU equality rules are due to be reviewed.
The delay will also give insurance companies and risk assessors time to change the template for risk assessment by ignoring traditional statistical gender-based evidence.
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