Genetic Testing and the Power of Knowledge
Using genetic testing to make treatment decisions on serious medical conditions, such as cancer, is becoming more common. Approved tests number in the thousands, and the costs associated with genome sequencing have fallen sharply. Most genetic tests happen in a medical context, but concerned or simply curious consumers can access affordable services on the Internet.
Genetic information is treated exceptionally carefully but the growing use of predictive tests by consumers raises concern that the results could influence their appproach to life insurance. On the other hand, it’s important to balance concerns about the misuse of genetics results and the risk to public health if people avoid testing for fear of discrimination.
Gene testing is used primarily in diagnosis. Predictive genetic tests - the type bought over the counter - can determine a person’s risk of disease: for example, in a family where an illness is common among members, or where illnesses have occurred that are known to have a genetic component and can therefore be hereditary.
Although the personalisation of treatment affords an individual the best possible chance of survival and quality of life, in an underwriting context the priority is setting a reasonable premium on the basis of a statistical analysis.
Unsurprisingly, life insurers want to know if genetic tests can be used when deciding to accept an application or setting rates, and a review of international comparisons highlights a variety of approaches - all with different consequences.
The U.S. has state-by-state laws that regulate when genetic information may be used. In Canada a judicial review is considering recent legislation to restrict insurers using genetic tests completely. In Australia insurers may ask applicants if they have taken a test or plan to, and insurers select the information they use with extreme care. South African insurers operate under a code of conduct in which all previous tests should be disclosed. Singapore insurers don’t seek existing test results while in China no specific regulations are in place.
Laws in Austria, Belgium, France, Ireland and Portugal prohibit using any test results but insurers in Finland and Greece do not ask for genetic information prior to issuing a policy. In Denmark insurers may not use tests but in Spain no regulation specifically affects insurance. In the Netherlands voluntary regulation limits use by sum assured band. UK insurers abide by a voluntary moratorium with a single test approved for use on life policies above £500,000. In Germany applicants for life cover must report prior illnesses diagnosed by a genetic test, but insurers may not request or receive genetic test results on applications below €300,000.
That such a patchwork has evolved over time is no surprise. Many of the limitations were set before genomic treatment became commonplace, and did not imagine the popularity of predictive tests. Perhaps this is why the Council of Europe has left open the possibility of the use of genomic data by the insurance industry.
There’s an opportunity for insurers and their customers to jointly benefit from genomic advances - where the interests of both are aligned by a shared desire to avoid early death from known genetic risk. The PHG Foundation, a genomics think-tank, says that applying genomic techniques is essential for insurers that are keen to offer a more holistic approach to customers.
There are two sides to the story. On the one hand, any new information used by insurers must be evaluated carefully, as not all genetic information is useful at accurately predicting risk. On the other, it is important to take into account the financial and moral risks to insurance pooling associated with a consumer holding potentially valuable risk information that he or she is not obliged to share. What impact this could have on the business models of insurers, and whether or not adjustments will be necessary, should become much clearer in the next few years.