What NZ insurers are doing about genetic testing
Genetic testing is one of the biggest issues to hit the life insurance industry for a long time. Good Returns examines the issues.
Monday, December 18th 2000, 10:20PM
No rapid move by New Zealand-based life insurance companies to require genetic testing by life insurance applicants is likely, as insurers adopt a wait and see approach to the revolutionary implications of the technology for their industry.
Royal & SunAlliance Life and Disability underwriting manager John Rossbotham says his company is following the Investment Savings and Insurance Association (ISI) approach. The ISI’s view is that applicants who have undergone genetic testing should disclose the results, but that life insurers would not require testing.
"Royal & SunAlliance agrees with the common industry feeling in Australia, the United Kingdom and New Zealand that insurers should not require applicants for insurance to undergo genetic tests but may require access to existing results of past tests and that insurers should not offer lower than standard rate premiums to applicants with favourable genetic test results," says Rossbotham.
"The ISI put a paper out on 16 August. Nothing in that will change our stance. It’s not the sort of thing we come across every five minutes of the day. In a nutshell, we won’t ask for genetic tests. We can’t. If a person has a genetic test available, we would expect to have that provided along with other medical information."
Rossbotham says Royal & SunAlliance is comfortable with existing codes of practice pertaining to genetic testing in Australia and the United Kingdom on the basis that any policy is better than none, and his company would not want to see insurers requiring tests and offering premium discounts for favourable results.
"Royal & SunAlliance awaits the outcomes of Australian Federal Government announcements regarding an enquiry into human rights, privacy and discrimination issues posed by advances in gene technology."
Rossbotham says Royal & SunAlliance has concerns about broader implications of genetic testing, including the predictive value of genetic tests, the fact that the danger of adverse selection is overstated as in most cases the risk could be identified through family history information, and the fear that allowing insurers access to genetic test results might make the public less willing to participate in genetic research.
In Australia, a November ruling by the Australian Competition and Consumer Commission said that life insurance companies for a period of two years would not require policy holders to undergo genetic testing.
The Australian government is expected to develop policies on the issue during that period, with the Australian Law Reform Commission and Medical Research Council at present conducting an inquiry into human genetic information privacy and discrimination issues.
The Australian Investment and Financial Services Association has formulated a policy to protect competition between companies by providing that members will not encourage life insurance applicants to undergo genetic testing by offering premium discounts to those with favourable results.
An Australian life insurance industry source says the broader issues raised by the new technology are expected to be dealt with by the inquiry over the next two years, with terms of reference due to be released early next year.
Detloff Rump of the Munich Reinsurance Company of Australasia told a Sydney conference in late November that genetic testing raised concerns on a number of fronts, including public fears that people might abuse genetic information, that unfair discrimination would occur, and that a genetic test might impact on a whole family
"And of course we have to appreciate that there may be conflicts of interest between say scientists and clinical medicine on one side and commercial organisations on the other side. Uncertainty is also a problem. We really don’t know much about the accuracy of genetic tests, and we can only speculate how they will be used in future. It is sometimes difficult to identify what the significance of a genetic mutation in an individual is. How can we determine polygenetic or multi-factoral risks and do we have sufficient prognostic data to support the result of our risk assessment ?
Sovereign risk product manager Michael Hewes says genetic testing is the most major change for the life insurance industry since the invention of the abacus.
"A lot of people are still adopting very much of a wait and see attitude to what is happening. We haven’t even started looking at differential rates for people who have had genetic tests. We’re very much aware of the issues. Prudent insurers such as ourselves are requiring a lot of research to see the implications."
Hewes says the issue is a minefield, and insurers cannot rush into policy decisions. Sovereign follows the Association of British Insurance code of practice, not requiring testing but using existing test results in a controlled way.
"There are privacy issues. If my Dad gets a genetic test done on himself, how long do you carry on the genetic stream? Does it apply to me and my children? There are also anti-selection issues. Do we all of a sudden have an underclass of people who are uninsurable?"
Hewes says other issues include the cost of genetic testing and whether New Zealand laboratories, already overloaded in relation to police DNA tests, could cope with a large volume of work.
He says research in this area will involve realignment of certain products as well as development of training products.
"Some people are more predisposed to cancers than others. We know that Israeli women have one of the lowest rates of cancer in the world. Pacific Islanders have the lowest rates of multiple sclerosis. It’s just very wide-ranging because the issues are so enormous."
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