Q&A: ECJ's ruling signals major changes ahead for insurance firms

Q: What does the ruling say?

A: The European Court of Justice has ruled that using gender as a risk factor in setting premiums for cover such as car, medical and life insurance, and for setting annuity rates, breaches EU rules on equality.

Q: What impact will it have?

A: The ruling means that insurers will no longer be able to base their rates on different statistics about life expectancy or road accident rates by sex. .

Q: So is this good news for young male drivers?

A: While it has been described as a "victory for boy racers", and young men are likely to see their insurance premiums fall as a result, they are not expected to drop as low as women's. Instead, female drivers are expected to see significant price hikes.

Q: How does the ruling affect pensions?

A: Annuity rates are currently higher for men than they are for women to reflect the fact that women have longer life expectancy than men, meaning the annuity will be in payment for longer. But the change is expected to penalise men more than it benefits women.

The Association of British Insurers estimates that men approaching retirement could see an 8 per cent reduction in annuity rates, while women are expected to see only a 6 per cent rise. Four out of five annuities are currently bought by men.

Q: When does it come into force?

A: 21 December , 2012. giving insurers a transitional period.