Background: Disappointment over 'lack of common sense'

The European Union has been accused of meddling in the UK's insurance industry, following yesterday's European Court of Justice ruling that companies would no longer be allowed to offer lower insurance premiums based on a customer's gender.

The sector in the UK is more heavily-based on customer profiling than other European countries - but the ruling, which was sparked by a campaign by Belgian consumer group Test-Achats, will mean that gender can no longer be taken into consideration.

Theresa May, the Home Secretary and minister for women and equality, expressed disappointment at the decision, which the UK cannot opt out of. She said it "goes against the grain of the common-sense approach to equality being pioneered by the UK government.

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"Nobody should be treated unfairly because of their gender, but financial services providers should be allowed to make sensible decisions based on well- defined risk factors."

AA spokesman Ian Crowder said the decision should be made on a country by country basis. "The UK's insurance industry is the most sophisticated in the world," he said.

"Companies have tonnes of data, which allows them to assess the risk profile for a 22-year-old woman driving a Peugeot 106, living in Edinburgh and working as a midwife.

"We think this is a very unfair decision by the EU and there is now no recourse for appeal - the only way things would change is if Britain was no longer part of the EU."

It is understood the changes will affect insurers in France and Spain as they also use age as part of their risk-profiling.

Dr Ros Altman, the director-general of Saga, added: "The European Court has dealt a further future blow to Britain's already struggling pensioners. In defiance of common sense and logic, insurers will be barred from pricing their products on the basis of risk."

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