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THE life insurance industry’s approach to risk assessment based on genetic information requires scrutiny, according to the authors of a report about a man whose genetic history was apparently used inappropriately by an insurer.
In an “Ethics and law” article in the latest MJA the authors said the man had tested positive for the MSH6 gene, elevating his risk of Lynch syndrome (hereditary non-polyposis colorectal cancer). (1)
Before genetic testing, he had been denied full life insurance cover by two insurance companies because he revealed that he had discussed genetic testing with a genetic counsellor. After he tested positive for the gene mutation, a third company offered only restricted cover.
However, the man challenged the third company’s decision, saying annual colonoscopies would render his risk [of colorectal cancer] no greater than that of the general population. The insurance company offered the man full cover after he took his complaint to the Australian Human Rights Commission.
Under the Disability Discrimination Act, insurers are allowed to consider genetic information in underwriting life insurance decisions. However, such decisions must be justified with actuarial and statistical data and industry standards require insurers to take into account the benefits of medical surveillance.
Professor Ronald Trent, professor of medical molecular genetics at Sydney’s Royal Prince Alfred Hospital, said the full reasons why the insurance company had reversed its decision were not clear, but if the case was an instance of genetic information being used without appropriate actuarial evidence for risk, it was concerning.
Professor Trent supported the MJA authors’ call for further discussions about the effectiveness of current insurance industry practice, government policy and the adequacy of current laws.
“There has been ongoing dialogue for many years between the insurance industry, the NHMRC and government and it’s very important that dialogue continues and that any shortcomings are addressed”, Professor Trent told MJA InSight.
He said in instances where full insurance cover was denied based on genetic information, clear and simple explanations were needed to ensure the reasons could be understood by the general public.
Associate Professor Kristine Barlow-Stewart, director of the NSW Government’s Centre for Genetics Education, said the insurance industry needed to provide evidence that the case reported in the MJA was an isolated one and not typical industry practice.
“The Australian Law Reform Commission’s recommendations … were contingent upon [the life insurance industry] making changes to their practice. That would include providing reasons for non-standard decisions, such as an exclusion for cancer, and obviously that wasn’t done in this case”, Professor Barlow-Stewart said. (2)
A spokesperson for the Financial Services Council (FSC), which represents the life insurance industry, said they could not comment on the specific case outlined in the MJA, but there had been very few complaints about life insurance exclusions based on genetic information.
The spokesperson said insurance companies had to adhere to “robust and strict processes” around what information could be relied upon in life insurance underwriting decisions, and genetic information, where available, was just one of many considerations.
In addition to legal obligations, the spokesperson said FSC standards on genetic testing and family medical history guided its members in the appropriate use of this information. (3)
The spokesperson said genetic information “worked both ways”. “One of the biggest drivers for people getting a genetic test is family history. If you have a family medical history, but you have a genetic test showing that you don’t have that gene, you should be accepted at standard rates.”
Professor Barlow-Stewart said the MJA case highlighted the need to involve a genetics expert in cases in which consumers were concerned that their genetic information had been used inappropriately.
Professor Barlow-Stewart said community and primary care education was also crucial in dealing with this rapidly developing area, noting that the Centre for Genetics Information was a valuable source of information.
She said rapid genetic testing services now offered online by US-based biotechnology companies allowed people to get a whole risk profile. “I am sure that consumers are unaware that if they then apply for life insurance they will need to disclose the fact that they have had a genetic test.”
She said uncertainty remained about whether this information could then be used by insurers to make underwriting decisions.
1. MJA 2013; 199: 363-366
2. Australian Law Reform Commission, The use of genetic information in insurance
3. FSC 2005: Genetic testing policy
Seems to me that the spokesman has let the cat out of the bag:
“Standard Rates” are historically calculated and reflect the background distribution of risk genes in the community. If you are tested, you are no longer a member of the background community group, you are either Positive with a higher than community risk or Negative with a lower than community risk..
Iif the insurers want the right to charge a higher rate (or deny cover) to those proven to have the risk gene, then they MUST also offer a reduced rate to those who have proven themselves negative for the risk gene. “Standard Rate” can only apply to those who are untested, and therefore belong to the community average group
I suggest that one of the interested bodies put this specific question to the Financial Servies Council and Regulator. It appears that currently the insurers are passing on the cost to those who test positive and keeping the benefit from those who test negative. Clever. Unfair. Profitable.