The naked truth

Genetic testing is currently something of a topical issue, with stem cell research being trawled out time and time again in the mainstream media.

These tests offer a type of medical information. Rare conditions that are genetically tested are usually conditions caused by a change in a single gene. However, in the future, it may be the case that genes incorporated in the development of more common diseases, such as heart disease, will be uncovered. Such diseases are more likely to be caused by the interaction of several different genes, along with environmental effects, according to the Association of British Insurers' (ABI) guide on Insurance and Genetic Tests 2005.

However, the public is somewhat wary of genetic testing. Indeed, the Human Genetics Commission's (HGC) chairman, Baroness Helena Kennedy, says that its consultations have shown there is genuine public concern about genetics and insurance, and its findings illustrate people are discouraged about the concept of taking genetic tests for fear they may be seriously disadvantaged as a result.

This theory is compounded by an article in the Daily Mail back in 2000, which reported that, of the 1,000 people taking part in a survey by the HGC, 76% did not think insurance companies should be allowed to see genetic test results in order to set premiums.

According to the ABI guide, insurers are not allowed to ask potential policyholders to take a genetic test in order to obtain insurance.

The current situation regarding genetic testing is that a moratorium was imposed back in 2001 on all ABI member companies, stipulating that they would not be able to access consumers' predictive genetic tests. While this was back in 2001, the situation appeared to have continued satisfactorily as it was renewed in 2005.

The reality

Now, according to Jonathan French, spokesperson at the ABI, the guidelines are set to be reviewed in 2008, ahead of the 2011 expiry date. He adds that genetic testing is already in use but that insurers would not be able to make use of such measures under the guidelines stipulated in the current moratorium.

Kennedy supports the existing extension of the moratorium, commenting: "Those who are affected by generic conditions should not feel excluded from the normal benefits of society, which includes access to life insurance."

Robert Morrison, head of underwriting and claims at Bright Grey, says he also supports the current moratorium guidelines as, "they do not preclude an individual with a positive genetic test from obtaining insurance, yet allow the insurer to still perform risk assessment". He envisages that the current moratorium will be extended further post-2011.

Dr Virginia Warren, assistant medical director at Bupa, is hoping that the moratorium will be extended, arguing no genetic testing could be accurate enough to predict in which year someone with an inherited undesirable gene may develop the disease associated with it.

The guidelines of the current moratorium are that a consumer is able to apply for a total of up to £500,000 of life insurance, £300,000 of critical illness cover, and £30,000 annual benefit of income protection without being required to inform the insurer of the results of any predictive genetic test previously taken.

But consumers are required to provide insurers with any information they know about current or previous illnesses they, or their family, have had if it is requested on the application form to avoid non-disclosure problems.

Warren adds: "The key point is that it is the duty of the applicant to disclose if they have a family history of, experiencing symptoms of, or are receiving treatment for, a genetically inherited condition."

Disclosure

Any amount of insurance taken out that exceeds the given amount means the consumer would need to tell insurers the results of those genetic tests that an independent Government committee has approved as relevant to insurance companies.

Mick James, marketing protection manager at Standard Life, believes that some people in the industry will advocate the extension of the moratorium beyond 2011, on the grounds that it has only limited practical impact on underwriting because the moratorium, in effect, only applies to one specific genetic test - Huntingdon's disease.

Implications of the current guidelines suggest there are two ways this particular moratorium could go. Either there will be a time when genetic tests are accepted by the public and the Government as another piece of medical information, to be taken into account during underwriting; or, there will be a complete ban on genetic testing in setting premium rates except in some extreme cases.

Jason King, managing director at Torquil Clark Life Insurance, says: "The pace of medical testing will only advance, and at some stage the industry has got to decide how to manage the risks and opportunities presented by genetic testing."

He adds that a flexible approach needs to be taken and each test assessed as it becomes available. So that a test is acceptable when setting premium rates, it must be proved to be reliable first, otherwise it naturally serves no purpose.

Additionally, Bob Perks, director at Falcon, says: "I think once the scientific accuracy of these tests is proven, then they will be looked at by insurers as yet one further way of quantifying risk."

However, as Warren points out, in addition to the two ways that the current moratorium could go, she agrees with the idea of a third option whereby the current situation will continue, adding: "It is impossible to predict what the Government view or public understanding of, and reaction to, developments in human genetics will be in four years time."

There are wider implications of genetic testing because, potentially, it could well mean that, on the basis of a predictive test, consumers could decide to buy or not buy insurance. However, as King suggests: "They could also choose preventative treatment to avoid the potential disease. However, he adds, in terms of insurance, the risk is that premiums would rise dramatically or some even be withdrawn if the ability to get predictive genetic tests becomes wider. This would be because insurers could be selected against - effectively disrupting the balance of their books of risk.

Discussing the idea of the risk involved, James says, when taking out insurance, it is wise for the consumer to inform the insurer of any known relevant facts so that the latter can judge any impact on the risk involved.

He also agrees that it may cause individuals to be put off from taking the test in the first place. However, James adds that: "While we accept that this indeed may happen in a small number of cases, we do not feel this is sufficient justification to expect that the terms given should be subsidised by others."

Perks also suggests some customers will be rated by insurers in order to allow for the results of the tests and they may well find their cover more expensive. Other customers, of course, may find premiums reduce as certain conditions are eliminated.

But, for the time being, fairness on both sides of the coin - consumer and industry - appears to reign, Morrison says when discussing implications for consumers.

Although the argument that genetic testing would create a class of people who are unable to afford insurance does hold some merit, James insists that, in many cases, life cover could still be offered after taking account of adverse genetic tests, but perhaps on rated terms.

Necessity

There is also speculation that, in the future, society may make it necessary for a certain level of cover to be made available to all and, in such a situation, everyone else will have to pay an additional amount, essentially bearing the brunt of the situation, he adds.

Slightly less plausibly, James also ponders the idea that, with perfect genetic testing, there becomes less of a reason for insurance at all as the insurer will surely have perfect knowledge and will therefore charge policyholders exactly the right amount to cover their risk. "If the market developed to this extent, then it would probably make more sense for customers to create their own savings funds rather than seek insurance," he says.

Thankfully for the industry though Perks says that in his line of business he would only consider using genetic testing as "another factor in accurately assessing risk and pricing accordingly".

According to James, Standard Life would also consider using such tests providing they were proven to be accurate, adding: "We would use the results to create a tailored price for the customer which accurately reflected their risk".

Genetic testing therefore appears to have great potential in this industry. It could become another of the standard pieces of medical evidence - initially being requested for high sums assured, but "as test costs gradually reduce then the tests would be more frequently applied," according to James.

However, Morrison adds that at Bright Grey it would not look to implement genetic testing "in the foreseeable future".

Breaking down boundaries, certainly in terms of genetic testing, is the way forward for this industry. Indeed, as Morrison suggests, there will be an increase in those conditions currently approved for use such as with Huntington's Disease but "in terms of the moratorium I do not expect a significant shift in the next few years".

Perhaps even further in the future, stem cell research will break down even more barriers. Although different to genetic testing, in so far as stem cell research looks at cures rather than assessing risks, both are controversial in consumers' eyes. However, as James suggests: "The strides in knowledge that are being made as a result of stem cell research will ultimately lead to huge gains in health right across the world. There will always be some sort of regulatory regime in place that will put a break on such research to take place unfettered, and while controlling the pace of the research gives society time to get used to the developments, ultimately science will continue to push the research to the limits of what society deems is acceptable."

Fundamentally, consumers' perception of genetic testing is akin to the suspicion and certain contempt of the potential use of such tests for insurance purposes. However, if handled with care, this is something the industry could look to implement, perhaps to great effect.Genetics and insurance - the ABI's viewAdvances in medical science bring enormous benefits for individuals and the society, but also court controversy. Genetic science is one such area. For many people, taking a predictive genetic test to determine whether they are susceptible to a particular condition can be important, both medically and psychologically.

The insurance industry is very clear on the issue of predictive genetic testing. It does not affect an individual's ability to buy life and protection insurance. People should not be put off from having a genetic test because they think it could have an impact on a future protection insurance application.

The Association of British Insurers (ABI) proposed and the Government agreed a moratorium on the use of predictive genetic test results for insurance purposes. This will last at least until 2011 and is monitored very closely. There is one exception, for Huntingdon's Disease and life insurance, and even in that case insurers cannot use a test result unless the level of life cover exceeds £500,000 - less than 3% of all applications. There are no plans for the ABI to apply for other genetic tests to be used. However, consumers can use negative test results to overrule any increased premiums due to family history of a condition.

A Department of Health committee, the Genetics and Insurance Committee, oversees the moratorium and will begin a review of the current arrangements in 2008.

The ABI will play a full part in that review. Science and society's views on the value of genetic tests are at an early stage. It is important that the industry does not leap towards legislation in this area which may later be regretted.