Memorandum submitted by Prudential plc
We understand this is an area of public concern.
However, it is our belief that the UK industry, including Prudential,
has acted with integrity in its approach to these sensitive matters.
Genetics is still relatively new and decisions
taken now could have profound implications for the future. The
way forward is through consultation and agreement based on an
understanding of the issues we face.
Q1. What is your policy towards the use of
genetic test results, and what are the reasons underlying it?
Our policy is based on compliance with the Association
of British Insurers Genetic Testing Code of Practice.
Amongst the key elements of the Code of Practice
(a) an applicant for insurance will not be
asked to take a genetic test as a condition of offering insurance;
(b) to take into account only those genetic
test results approved for use by the independent Genetics and
Insurance Committee (GAIC);
(c) the test results approved by GAIC will
only affect applications for insurance where they show a clear
increased risk of genetic disease and the result is relevant to
the application in question;
(d) to seek expert medical advice when addressing
the impact of a genetic test result on individual applications
(e) if the genetic risk appears too great
to insure, we will try to offer a constructive alternative;
(f) the result of a genetic test will not
be used to underwrite another member of the family;
(g) strict rules of confidentiality and security
covering genetic and other medical information; and
(h) genetic test results need not be shown
in new applications for life insurance for sums up to £100,000
which are directly linked with a new mortgage.
The reasons underlying the use of genetic test
results relate to the basic principles of insurance, this is the
payment of premiums which create a fund from which likely claims
can be met. The individual premiums are set in accordance with
the risk brought to the fund. The competitiveness of the industry
allows the applicant to seek the best premium rates on offer.
Relevant genetic test results, by definition
those approved by GAIC, like other forms of medical information
provide insight into the risk presented. Our purpose in using
these genetic test results is to allow fair assessment of this
risk. If this right of access to test results were lost, the fund
would be exposed to anti-selection from individuals who could
at worse, over insure or at best, pay a premium not truly reflecting
the risk brought to the fund. In the longer-term the likely outcome
of this would be higher premiums for all.
Insurers also have a responsibility to protect
the interests of existing members of the Fund from exposure to
anti-selection. Customers have the right to expect their policy
to pay out in the event of a claim.
Q2. What scientific advice have you based
your decision upon, and how reliable do you consider it to be?
Any application for insurance which includes
the result of a genetic test is reviewed by our Nominated Genetics
Underwriter (an individual appointed at the suggestion of the
ABI). In the case of Prudential, this is our most senior practising
underwriter with over 20 years' experience in his profession.
He would then consult with our Chief Medical Officer prior to
reaching a decision.
In the event an expert opinion is required to
interpret the risk presented, we would consult with the ABI's
appointed Genetic Adviser.
In terms of the risk presented by adverse genetic
test results we rely on the statistical interpretation provided
by Reinsurance Companies in their underwriting guidelines, medical
literature, papers and research bulletins provided by the ABI's
Genetic Adviser and attendance at relevant seminars and conferences.
It is our belief that all these sources of advice
are very reliable and form the best available basis for providing
fair and accurate assessment of risk.
Prudential, along with a number of other insurers,
are currently supporting and funding independent actuarial research
being undertaken at Heriot-Watt University into the impacts of
genetics on insurance. Whilst the results will be for public consumption
we hope they will provide us with greater understanding and guidance.
Q3. The GAIC recently approved the use of
results from the Huntington's disease genetic test in the assessment
of life assurance policies. If you generally accept the use of
such results in assessing risk, do you anticipate using other
genetic tests in the future and if so when? In particular, would
you consider using test results for diseases which are not single
gene defects, or where there are non-genetic influences (for example
heart disease)? What factors would you base your decision on?
We do accept the use of genetic test results
for Huntington's disease subject to the restrictions outlined
in the answer to Q1. It should be noted this applies equally to
negative test results as well as positive.
Further applications have been made by the ABI
to the GAIC covering the use of genetic test results in relation
to early onset Alzheimer's disease and Breast/Ovarian Cancer.
These applications have been made in the belief they will meet
the strict criteria set out by the GAIC for use of genetic tests
by the insurance industry. We shall accept the ruling of the GAIC
and if the tests are passed we would use them in our assessments.
Any prior assessments made on the basis of the
above-mentioned genetic tests which are rejected for use by the
GAIC will be revisited back to 1 November 1998 in accordance with
ABI guidelines and any increase in premium imposed refunded. Our
records at the Prudential indicate we have no such cases at present.
It is our understanding that there are no non-single
gene defects which would currently meet the GAIC criteria. It
is far less clear whether polygenic disorders, some associated
with common causes of death, will affect life assurance significantly.
The epidemiology is also less conclusive because of lower levels
of risk and the influence of other factors such as lifestyle and
If actuarial data were to emerge from research
which demonstrated a relevant and quantifiable risk, this position
would need to be reviewed. In any event, any use of such tests
would still be subject to the process of application to the GAIC
and again we would stand by their decision.
Q4. How effective do you feel the current
regulatory system is?
The regulatory system which governs the use
of genetic test results by the insurance industry in the UK, is
contained within the ABI's Genetic Testing Code of Practice.
The Adjudication System which relates to any
complaints or breaches is a cornerstone of the Code. An independent
Tribunal sits at the head of this process, their findings are
binding on ABI member companies. Indeed, it is a condition of
continuing ABI membership that insurers abide by the rules of
the Code at all times.
The CEO of an ABI member company is required
to sign an annual statement confirming compliance to all aspects
of the Code. These statements are subject to careful scrutiny
by the ABI. Prudential comply with this requirement and were last
year given recognition from the ABI for demonstrating good practice.
Having the Rules contained in a Code of Practice
rather than backed by Statute has allowed the Code to develop
regularly in response to advances in genetics and any fresh concerns
raised by interested parties. The Code was welcomed by Government
following the Human Genetics Advisory Commission report on insurance
and genetics. We and the industry look forward to supporting and
providing input to the work programme of the new Human Genetics
In the Code we have an internationally recognised
model for dealing with the sensitive issues of genetics and insurance.
In short, a sensible and effective regulatory system, accepted
across the UK insurance industry with the power at its disposal
to ensure those in breach of the Code face stiff penalties and
22 January 2001