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Advisers prompt firm's early change to 'gender neutral rates'

Insurance company LV= has announced that it is to offer "gender neutral rates" on the insurance cover it provides from the beginning of December, three weeks before EU law requires it to do so.21 Sep 2012

The company said that the move "provides certainty for advisers" and would ensure that it can process all applications for cover based on "gender specific rates" in time for the 21 December date of compliance.

"Announcing how we will deal with our pipeline business means advisers can plan with confidence ahead of the gender directive," Mark Jones, head of protection  at LV= said in a statement. "They can now be certain of securing gender specific rates for their clients if they want them, for applications received by LV= between now and 1 December. Given the expertise of our underwriters, we are confident fewer than 1% of policies put on-risk will need to be altered once we have received any further medical evidence retrospectively."

"We've listened to adviser's requests to provide a clear, simple and common sense approach to pipeline business, and switch to gender neutral rates ahead of 21 December to avoid any last minute uncertainty. Advisers are now guaranteed not to miss the gender deadline or see clients face an enforced increase in premiums if they act now," Jones added.

Last year the European Court of Justice (ECJ) ruled in a case brought by Belgian consumer group Test-Achats that using gender to determine risk when setting the price of insurance premiums was contrary to EU law. The ECJ said that the practice breached the EU's Gender Directive, and that an exception that permitted the activity was "invalid with effect from 21 December 2012".

LV= said that it would generally "guarantee" that applications for certain insurance cover would be set in accordance with gender specific rates between now and 30 November if there was "further medical evidence" needed to complete the application still "outstanding" on 1 December.

In those circumstances though, LV= said that advisers can request that the company calculate premiums based on gender neutral rates. It added that it will set premiums, under its guarantee offer, for its "female income protection business" in accordance with gender neutral pricing because those premiums are set to "decrease" under the new rules.