The Supreme Court has ruled that employer-sponsored pension and annuity plans cannot pay lower monthly benefits to women simply because women live longer than men. The insurance industry, faced with a major challenge in Congress to its use of sex as a basis for determining rates, has responded initially by playing down the impact of the court's ruling, and by saying it won't "revolutionize" the industry. Perhaps not right away.

The court's ruling, however, has far more widespread implications than the industry's response suggests. The court made a point of stating that "if it would be unlawful to use race-based actuarial tables, it must also be unlawful to use sex-based tables," under Title VII of the Civil Rights Act, which prohibits discrimination in employment.

Justice Thurgood Marshall, for the majority, reiterated a previous court finding that actuarial tables based on gender characteristics violate the law, even though they may accurately reflect a generalization about a group of people.

The court reaffirmed a basic civil rights principle that holds that individuals must be treated as individuals. In standing by this principle in the pension case, the court has set a standard for states that are considering insurance reform. It has also given a powerful weapon to the coalition of civil rights and women's organizations that is trying to remove sex as the basis for setting rates in auto, health, life, and disability insurance.

Ralph Neas, executive director of the Leadership Conference on Civil Rights, which has been at the forefront of the lobbying effort, hailed the court decision as a landmark. "Why should the insurance industry be granted this special privilege of being able to discriminate on the basis of sex?" he said.

The ruling applies to some 450,000 employer-sponsored pension plans affecting some 26 million employes in private business and state and local governments. It is not retroactive, a major victory for the industry, which estimated that this would cost it $2 billion.

Already, the court has signaled its ruling has broader implications than some of the narrower points argued in this case. It promptly sent back to lower courts three similar cases, two of them challenging sex-based retirement benefits of some 700,000 people at 3,400 institutions who are covered through the Teachers Insurance and Annuity Association and College Retirement Equities Fund.

Larry White, assistant counsel for the American Association of University Professors, which has fought for reform of sex-based pension plans, said he believes it may lead to elimination of gender-based rates in all employer-sponsored insurance and retirement plans. The court ruling is bound to be used in the congressional struggle to remove sex as the basis for rates in various other forms of insurance.

The insurance industry, focusing on auto and life insurance rates, has mounted an expensive media campaign to persuade the public that removing sex-based tables from the insurance system will cost women hundreds of millions of dollars. The National Organization for Women, however, has data showing that while women pay about $1,640 less for auto insurance over a lifetime because of a lower rate while they are young, they end up paying $15,732 more for insurance than men do over a lifetime because of higher costs in disability, life insurance and pension plans, and medical insurance costs.

J. Robert Hunter, a former administrator of the Federal Insurance Administration, who is now president of the National Insurance Consumer Organization, has argued further that young women would not pay more than they do now if mileage driven and driving records were used to set rates rather than sex. The General Accounting Office supported his conclusions.

There is nothing about discrimination that says it is right to discriminate against men and not against women. As they now stand, auto insurance rates discriminate against young men with good driving records and their parents who pay the bills.

The court has set a standard curbing sex-based discrimination in insurance and the industry would do well to get to the bargaining table on Capitol Hill and try to work out ways to adapt. There will be nothing simple about overhauling the current system, and the industry has gone to great lengths to avoid doing so.

It lost one of its best arguments this week.