Abstract

ABSTRACT The public controversy over sex‐based differentials in insurance pricing makes heavy use of terms like ‘fairness’ and ‘discrimination’; in particular, both sides argue that their position is the one dictated by considerations of fairness. Appeal to a basic principle of distributive justice shows that these differentials are not fair. Nevertheless, there is a substantial ethical argument to be made for the industry's status quo, based on the liberty of the low‐risk insurees. The paper considers an alternative reform proposal, with a qualitatively different freedom cost; seven factors are then identified as useful in evaluating the trade‐off between the freedom and justice at stake in any questionable insurance classification variable. A brief concluding section attempts to generalise this analysis to provide a broad framework for the analysis of other discrimination issues.