Theories of actuarial science have been used since the advent of modern-day insurance. Actuarial science can provide general insight into risk management issues (Poitras, 2002). It examines situations where the chance of loss or no loss is considered. The concept of insurance is hinged on the aspect of risk sharing (pooling of risks). Insurance often uses actuaries to perform risk assessment and determine the level of premiums that an individual need to pay according to risks that may occur. Different people from different occupations are predisposed to different risks.
Therefore, insurance companies find it difficult to assign a uniform premium rate to clientele in the same pool since these clients suffer different levels of predisposition to the same risks. The ECJ made a final ruling that determined that the offering of different insurance premiums or other benefits based on gender are a violation of the fundamental right to equal treatment. In this ruling, the ECJ; the highest European court, barred European insurance companies from pricing premiums differently based on the sex of prospective policyholders. Women tend to obtain cheaper premiums as they attributed to as a low-risk group.
The court termed this action as being against an EU directive that stated the union should always aim, in all its activities, to promote equality between men and women. The court ruled that the rules were not compatible with Article 6(2) of the Treaty. The decision by the ECJ on the insurance discrimination case was met by inflamed opinions concerning the authority of supranational European legal bodies (Lui, 2011). The case based on Council Directive 2004/113 implementing the principle of equal treatment of both genders in the access to and supply of all goods and services.
According to Wagner (2011), a directive, in European law, tells member states on what they ought to achieve but the details on how to go about the achievement are left to the member state to decide.
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