Insure Against Genetic Policies

Sydney Morning Herald

Wednesday August 16, 2000

Anne Lampe

Genetic testing has become the hot issue of the month in medical and insurance circles, but there is some confusion about where everyone stands on it. Certainly it is something that should be properly thought out before any move is made to introduce it on anything other than a voluntary basis, if at all.

Usually, such testing is used by individuals who want to know if they carry a particular gene, or a high risk of a disease, that they don't want to pass on to children. The use of genetic testing for commercial purposes, such as the weeding out of bad medical risks by insurance companies, should be opposed.

If insurers get access to applicants' genetic blueprints it will only be a step and a jump before employers also want them to determine whether employees are prone to illness and likely to need more than the average amount of time off work.

Then travel insurers may refuse to accept the risks associated with a traveller prone to serious illness going overseas - something that could cost them a bomb when the policyholder is hospitalised. Down the track, retirement homes might want to know from your genetic blueprint whether you are likely to require their services for a long or a short time, and what the usage of their medical services might be.

The life insurance industry has made it clear that it does not support genetic testing as a prerequisite to the purchase of life and disability insurance. But it has also said that if the insurance applicant has had a test for some other reason, that test, along with other medical information in the applicant's possession

and memory, must be declared to the insurer.

Not declaring it would enable the insurer to refuse to pay out on a policy, particularly if an illness for which there is some medical history appears soon after the policy has been taken out.

Applications for life, disability, sickness and accident cover already require extensive disclosure of family illness and early-death history. They also require disclosure about smoking levels, alcohol consumption, dangerous sports played and previous operations or illnesses. These factors are assessed to determine whether the applicant pays standard premium rates, or must also pay a premium loading - or whether he or she gets rejected. But in most cases, the applicant has the opportunity to improve his or her health profile by losing weight, exercising, ceasing to smoke, drinking less and so on. Taking this action often moves a loaded risk to a standard risk.

Twenty-five years ago, insurers began to offer generous discounts for non-smokers, cutting premiums by up to 40 per cent. A genetic blueprint, however, is something no-one can do anything about. It may reveal that an insurance applicant has a

higher-than-normal chance of developing a particular disease - though, in fact, they may never get it - and he or she could end up paying premium loadings or be rejected as a risk on the basis of that blueprint.

Such blueprints should have no place in the armoury of commercial organisations. The issue of whether genetic testing should proceed, even on a voluntary basis, for insurance purposes has become the subject of separate inquiries by the Australian Competition and Consumer Commission and the Institute of Actuaries. The Institute will produce a report on the issue for next year's annual conference.

Last week, a straw poll of actuaries and life insurance executives on the issue indicated a mix of views. One was that life and disability insurers already asked a raft of questions about family medical history and personal health history, and that one more test - the genetic test - would make little difference.

Some even suggested that such tests could lead to insurance discounts for particularly good risks in the same way that non-smokers now receive premium discounts. Others warned against their introduction on a voluntary basis, claiming it was the thin edge of the wedge for further intrusion into insurance applicants' lives.

Once information from genetic tests is generally available, the industry would use the information to weed out bad risks. Those unlucky enough to have a genetic blueprint that indicates medical trouble down the track would find it difficult to get cover, or would be required to pay high loadings to get their own policy. Then they would have to join an average risk group, such as a superannuation fund, which does not require medical evidence, and go into a pool

of members paying standard premiums.