Money: If the genes don't fit...

Insurance might be determined by genetic tests, warns Nic Cicutti

Insurance, we are often told, is bought, not sold, stuffed down the throats of reluctant clients by salesmen desperate to convince them of its merits.

But after this week, the prospect of a complete about-turn in the relationship between insurers and insured offers itself up instead. The potential for a new "insurance underclass", unable to obtain cover because genetic tests reveal the possibility of a particular disease, suddenly exists in the wake of a new policy statement by the insurers' trade body, the Association of British Insurers (ABI).

The ABI this week announced that henceforth it will require anyone who has had a genetic test to reveal the findings to his or her insurer.

Its decision, presented as merely the distillation of existing practice, carries with it the potential for thousands of people to be told that the life cover, pension protection or health insurance they are seeking will either be denied to them or will cost considerably more to buy.

The ABI's statement was couched in a concessionary manner: prospective policyholders will not be required - yet - to take out compulsory tests when they apply for insurance cover.

New applicants for life insurance up to pounds 100,000 linked to buying a home, such as mortgage endowments, will see the results of any genetic testing disregarded even if they are to the detriment of the applicant.

Moreover, declared Tony Baker, the deputy director-general of the ABI, companies will be able to decide for themselves whether they wish to improve on the basic concessions made by his trade organisation.

"A number of companies have indicated that they will be building on the statement because their own circumstances will allow them to go further," he said.

Cornhill, one such company, immediately announced that the pounds 100,000 "disregard" of any genetic test result would be applied to any type of insurance, not just related to home purchase.

Virgin Direct has pledged to go further. It will not ask life insurance applicants for the results of any genetic tests, regardless of the sum insured.

Standard Life, the UK's biggest insurer, is going even further. The company said this week that for the foreseeable future it would not seek the result of any genetic tests from policyholders.

Noticeably, however, neither Virgin nor Standard Life is able to commit itself in perpetuity to this policy. Indeed, the ABI's own statement last week has a very limited time-frame of two years, after which period it will be reviewed again.

Central to the unwillingness to look further ahead than this is the changing nature of genetic testing itself. The science is currently at a very early stage. In the past two decades or so, a number of genetic tests have been available to identify a range of diseases. Doctors can already diagnose the most common single gene defects such as muscular dystrophy.

Up to now people have taken the tests if there is evidence of genetic disorder in their family. Companies had the right to ask for the results of such tests, although their relative lack of sophistication and the fact that they could be applied to so few diseases meant that there was little pressure on them to consider the issue in more depth.

All that has changed as the possibility of developing new "multi-factorial" tests opens up. These would be far more accurate in determining a person's predisposition to certain illnesses, as well as diagnosing their potential life expectancy. Experts say it will soon be possible to predict the risk of more common disorders such as diabetes or rheumatoid arthritis, while heart disease and cancer may only be a few years away.

The dilemma of such successful testing, however, is that insurance companies fear they could be hit by policyholders who, aware of their potentially low life expectancy, use the knowledge of the results from their genetic tests to obtain vast amounts of cover for themselves.

Insurers argue that they could be selected by people who are more at risk. In turn, this would raise premiums for all policyholders, undermining the "principle of good faith on which insurance is based", as the ABI describes the choleric attitudes the insured usually feel towards their companies.

Conversely, geneticists and other experts argue people might be deterred from taking tests if they believe this could reduce the availability of insurance or raise the cost of cover. In particular, where life insurance is usually a standard demand by lenders, people could be denied a mortgage on their test results.

A British Medical Association spokeswoman argues: "We are worried about the extent to which genetic information, which can be extremely complex, could be misinterpreted.

"We are very pleased that the ABI has clearly stated that they will not be asking anyone to take a genetic test when they apply for life insurance.

"We remain worried about the increasing use of people's health information for non-health issues and would be concerned if people were discouraged from finding out more about their health needs because of fears about the social implications."

Insurers are keen to reassure us. The ABI promises that its members will treat all genetic information in a confidential, sensitive and responsible way. It has appointed Professor Sandy Raeburn, a leading geneticist at Nottingham University, to sit on its genetics committee, which will oversee the insurers' code of conduct.

All information passed to insurers by prospective policyholders will be analysed to see whether it contains information that might be used to determine the degree of risk that subsequently arises in relation to the outcome predicted by the test.

In this way, insurers hope to avoid a repeat of the late-80s AIDs debacle. Then, many companies asked questions about HIV tests and general lifestyle on their application forms. Cover was then denied to those who said they had taken a test, or premiums massively increased.

Years later, mortality rates showed that people were far less at risk than had been thought, by which time they had already paid through the nose for their cover.

Despite emollient words, the prospect of a similarly large group of people being discriminated against because of tests is there and is increasing. Genetic testing can only grow in importance and accuracy, with dire consequences for those most at risk.

Genetic facts at a glance

Genetic tests can predict a range of diseases, including Huntingdon's Chorea, and single-gene defects.

Scientists believe they will soon be able to have multi-factorial genetic tests which can accurately predict the likelihood of cancer and heart disease, among others.

Insurers worry that they may be targeted by people who insure against them without disclosing test results.

But scientists argue that tough disclosure rules may prevent people from taking the tests altogether.

The industry says it will disregard genetic tests, even if negative, on life cover for mortgage applications up to pounds 100,000.

Some companies go further, but warn they cannot sustain this indefinitely, as new tests become known.

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