The court did give the market some valuable breathing space with the new rules not coming into force until December 2012. From that point gender will not be an acceptable underwriting criteria for the market.

As the decision was handed down Michael Mendelowitz, dispute resolution lawyer and head of the contentious insurance and reinsurance practice at Norton Rose LLP said that the core ingredient for any smooth transition in terms of reinsurance programmes will be a common sense approach by both parties.

"My feeling would be that pricing will not be an immediate issue, loss exposures - whether on an accident/occurrence/event basis or in the aggregate - are unlikely to change significantly if at all,” he said. “A more difficult question will be the adequacy of premium rates: the natural tendency of underwriters will be to increase the rates which are currently lower than to decrease the rates which are higher, but the markets which we're talking about - particularly motor - are fiercely competitive, so one should probably expect an evening out of rates in the medium to longer term.”

Mr Mendelowitz: "The market will need, first of all, to consider very carefully the exact terms of the declaration that the court has made: my understanding is that the case has gone forward to date simply on an issue of constitutional law - i.e. is the Belgian legislation which enacts the derogation from the Gender Directive valid or not? A finding that EU member states or insurers in those states have been breaching the EU Treaty or Charter of Fundamental Rights does not necessarily mean that the policies that the insurers have written up to now are void or even voidable.  If however the upshot is that certain policies are indeed invalid, then - although a transitional period may be illogical in the circumstances - insurers and reinsurers can be expected to behave sensibly and use the breathing space to renegotiate reinsurances of policies which may be invalid.  If such renegotiations fail, the proper legal analysis would seem to be that all affected reinsurance contracts will be automatically terminated by reason of frustration. The parties will have to make restitution of benefits received with a view to putting each other back into the position which they were before the contracts were entered into. That, however, is bound to cause practical difficulties.

"I would expect the market to behave rationally and not to panic. Most reinsurers will probably seek to initiate a dialogue with insurers and vice versa. Some parties may, however, see this as an opportunity to escape from contracts which have turned out to be commercially disadvantageous and will therefore argue that as the original contracts are invalid, the insurer has no risk to reinsure.  We can therefore expect disputes to arise".

Katie Tucker, Lawyer in theInsurance group at law firm Pinsent Masons, said the delay in implementation gave the industry a vital buffer to ensure its approach will meet with the new guidelines, but there remained a huge level of uncertainty.

“The inclusion of a transitional period under the judgment will provide a huge relief for insurers,” she added. “This is good news for the insurance industry that will have a decent amount of time in which to bring their systems and processes into line. The transitional period reflects the Court’s appreciation of the huge change its ruling will mean for the way in which the insurance industry prices and provides benefits under insurance.

“A real concern is the remaining uncertainty relating to the impact of the judgment on premiums and benefits for policies written prior to 21 December 2012. It will therefore be important for the FSA to be fully engaged with the issues and to provide clear guidance so that insurers can get comfortable that they are achieving the EU’s goals in a way that is compliant from an FSA perspective and treats customer fairly.”

Rating agency Fitch said it believes the ruling, while significant, was not expected to impact rating levels.

Martyn Street, Director of Fitch’s Insurance team said the ruling would be particularly significant for the motor insurance industry, where young women’s premiums are likely to rise. Female drivers with little or no driving experience are likely to be the most heavily penalised by the rule changes.

“The 17-29 year age bracket is again likely to see the greatest rate increase, as was the case in 2010 when UK motor insurers increased rates by 30%-45% for this bracket in an effort to restore profitability,” he added.

For the motor insurance industry as a whole, the ruling could be seen as good news said Fitch, as it will provide insurers with the opportunity to raise prices in a difficult market, given the UK motor insurance for instance, has been loss-making in recent years.

“More sophisticated insurers are likely to use the gender ruling as an opportunity to refine their pricing models,” added Mr Street. “Rather than applying a blanket increase to premiums, insurers may try to re-price their policies away from gender-specific factors. This could include a greater emphasis on other indicators of risk, such as previous driving history, occupation and postcode.”

“This ruling also has major implications for future pensioners, as annuity rates which are currently based on gender-specific life expectancy will be significantly affected,” explained said David Prowse, Senior Director at Fitch. “For men, annuity rates look set to fall, meaning men’s pension pots will convert into lower pensions. In contrast, women stand to get higher pension payments as a result of the ruling. Currently women typically receive lower pensions payments as they are expected to live longer.”

The ruling is likely to cause some disruption for insurers while they adapt their underwriting and pricing systems to comply with the new requirements. However, Fitch said it expected most insurers will be able to cope with the changes.