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Assurers Test the Water on Gene Results

Posted on: Monday, 20 February 2006, 12:00 CST

By Teresa Hunter

MANY women will have been disconcerted by reports last week that they will be barred from buying life assurance if they take a genetic breast cancer test.

The disease is the second-biggest killer of women, with 40,000 diagnoses each year and 13,000 deaths. It is no respecter of the rich or famous, as Kylie Minogue's recent battle with the illness illustrates.

The Association of British Insurers moved swiftly to assure women that insurers would not ask for women to take genetic breast cancer tests, or require them to disclose the results of any tests they may have taken.

Furthermore, nor would they, until the current moratorium on using genetic test results for underwriting life and health insurances elapses in 2011. What happens after that date, though, will depend on the outcome of a review by the Genetics and Insurance Committee, which will be launched in two years.

While the ABI, anxious to alleviate public concern, is hinting that the moratorium could be extended, there are others within the industry who believe further debate on the use of these tests is long overdue.

Nick Kirwan, protection marketing director at Scottish Widows, said: "We need to have a proper and rational debate about this subject, but it is all so emotive. As soon as you say 'genetic testing', people start thinking about Frankenstein and Dolly the Sheep.

"But if we are not careful we will end up with an imbalance of information. It is not about where we are at today, but where we might go tomorrow."

It is a far cry from the founding days of life insurance, when death was a frequent event in most families and people were content to pay into a pooled risk, in the knowledge that the lucky ones were those who would not receive a payout. If you survived you were more than happy to subsidise the families of those who didn't.

For most of the 20th century, few health questions were asked of those applying for straightforward term or mortgage protection insurance.

However, the industry took fright at the apocalyptic prediction of how Aids would devastate the population, and began introducing detailed health and lifestyle questionnaires.

At the same time, science became more confident about the role that family illness plays in the death of us all. Insurers wanted to know more about what our parents died from and our siblings suffered with.

Legal & General's protection development manager Roger Wells said that a premium price war also played a role in the growing inquisitiveness of underwriters.

He said: "There used to be very few if any health questions if you were applying for mortgage protection, for example, but premiums were probably higher as a result.

"But the market became much more competitive, and the price for lower premiums was that companies wanted to know much more about the health of those they were insuring."

About 15 years ago the first genetic tests became available which could be used by insurers to decide whether they should offer life and health cover, sparking a long debate.

Insurers wanted to use the tests to lower premiums to policyholders who were free from certain genetic predispositions to particular illnesses, to end the cross-subsidy with those with bad news printed in their genetic makeup. But this potentially could leave those who needed insurance most, unable to get it.

Charities warned this would lead to families being left penniless and homeless when a breadwinner died, because a parent had been unable to protect the mortgage or buy other life cover.

The debate narrowed to three or four illnesses, until the Genetic And Insurance Committee (GAIC) agreed that only one test, that for Huntingdon's disease, was sufficiently reliable to be acceptable for insurance purposes.

From 2001, therefore, insurers have been able to ask insurance applicants to disclose the outcome of a genetic test for Huntingdon's disease, but only for life policies valued at more than GBP 500,000, critical illness at more than GBP 300,000 and income protection paying more than GBP 30,000.

The latest furore over breast cancer appears to have broken out because the GAIC posted a notice on its website suggesting that the ABI might apply for the breast cancer tests relating to the gene Brca1 and Brca2 to be considered.

However, the insurers say they were only asking for further research into a particular aspect of the testing and not with a view to calling for its introduction.

Yet the debate will not disappear. Kirwan said that although the concept of "pooled risk" still exists, it was only fair for individuals to pay a premium appropriate to the risk they bring with them to the pool. He said: "Insurers must always be awake to the dangers of anti-selection, and this is what you can get when there is an imbalance of information or risk.

"For example, by 2030, two people might be able to go into Boots and lick a slide. One of them discovers they will have cancer within five years, but die within another 15. We might then have a situation whereby the one who gets the bad news buys a massive amount of life cover, while the other one doesn't bother. But it is also about whether it is right for one customer to subsidise another. You don't expect someone who drives a Ferrari to pay the same motor premium as someone in a small Fiat."

This seems to miss the point. While you can choose not to drive a Ferrari, you can't choose not to die of cancer and financially abandon a young family. After all, it was the dire need to financially protect our offspring which gave birth to the insurance industry in the first place.

Source: Scotland on Sunday

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