The potential use of genetic information in assessing risk and the level of premiums remains an unresolved issue for the insurance industry. Here we identify some key arguments and the approaches taken in various jurisdictions .
Taking a strictly legal view, an insurance contract is a contract uberrima fides, i.e. in the utmost good faith, which means that any information having a bearing on the assessment of risk must be disclosed to the insurer. That obligation however is often restricted to specific disclosures in the proposal. Currently in the UK, there is a moratorium until 2011 on the right of insurers to require disclosure of genetic test results. One exception to this is the genetic condition Huntington’s Disease, where insurers can require that the results of genetic testing be disclosed to them.
Why permit disclosure of genetic information?
If it is accepted that insurers can legitimately seek and obtain other kinds of health information that predicts insurance risk, then why should they not seek genetic information that is predictive in the same way?
If insurers were denied access to any kind of health information, the industry would only be able to differentiate premiums according to very general risk markers such as age, sex, place of residence, occupation, etc. If, however, insurers are permitted to obtain certain kinds of health information such as body mass index, cholesterol concentration, results of a physical examination etc. are there still any principled reasons for excluding genetic information?
Genetic information is not special. It is not inherently more specific, predictive, sensitive, or private than other kinds of health information.
Presently, insurers can require disclosure of family history. In reality, such disclosure can amount to genetic information. Clearly, for some diseases, such as Huntington’s Disease, premiums are already raised if there is a family history, in much the same way as it is feared they would be if there was a positive genetic test.
There is an argument that better knowledge of genetic susceptibility might actually lead to individuals obtaining insurance where previously they had been unable to, for example, where there is a family history of a disease but the individual is proven not to be at risk.
Why preclude disclosure of genetic information?
There is a political argument that unfair discrimination could arise from false beliefs about genetic information.
Use of complete information (including genetic information) in underwriting could lead to a situation that is actuarially fair but socially unfair. Actuaries are, reasonably enough, concerned that if they are barred from using genetic test information they will price risks incorrectly. The result could be that the premiums collected would not cover the payments made and, in particular, that people would have an incentive to buy policies to cover risks known to them but unknown to the insurer.
There may be difficulties in defining what counts as genetic information. Genetic information can be obtained without invasive testing. Is taking a family history thus a basic form of genetic test? The most common genetic test is probably routine blood typing in hospitals but does that mean that knowledge of an individual’s blood type is one of the pieces of knowledge that an insurer may not seek?
It is thought that the requirement of disclosure may deter people from having genetic tests that are relevant to their health care. This may well be true, but the same is true for other health information - similar arguments were made about HIV testing.
Finally, experts have argued that allowing insurers to use genetic information is dangerous because a positive test for a “disease” gene does not mean illness is certain. Uncertainty exists as to how the industry might use the many genetic “markers” for common serious diseases such as cancer and heart disease.
Current position in other countries
Similarly, other countries are considering the impact of genetic testing on insurance. In the USA, the Senate has passed the Genetic Information Non-discrimination Act of 2005, which is currently making its way through the legislative process. This would prohibit discrimination on the basis of genetic information with regards to insurance and employment.
In Australia, the Human Genetics Commission of Australia was set up in 2003 to advise the government, insurers and the public on matters relating to genetics, including the use of tests for insurance purposes. Currently, no tests may be taken for insurance, although current results are used, with written consent.
Meanwhile, our neighbours in Europe for example, Belgium, Austria, Denmark, Estonia, France, Luxembourg and Norway have very strict legislation surrounding genetic information. Insurers are prohibited from asking questions about previous genetic testing and they cannot impose a genetic test on an individual.
In Sweden and the Netherlands, however, a compromise situation exists in that the use of genetic information is prohibited only if the sum insured does not exceed £100,000.
The results of the moratorium will be published in 2011. Given the advances in medical science, it may be only a matter of time before genetic information will be used to some extent in determining insurance premiums.
Contact
Hilary Steele
(Information posted in October 2007and may not have been updated at time of reading).