Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 100 - 119)



  100. Generally, before you use the results of these tests, should you not wait for detailed approval by the GAIC?
  (Mr Bedell-Pearce) The industry is not using the results of those tests in relation to those four conditions. The only test results that the industry is using is in relation to Huntington's, early onset familial Alzheimer's and breast and ovarian cancer due to the mutations of the two genes that I mentioned. In the case of Prudential and a number of other companies, we are only taking note now of one test, which is Huntington's disease, the one approved by GAIC.

  101. The Alzheimer's and breast cancer tests have not gone through the procedure?
  (Mr Bedell-Pearce) We are awaiting approval of those tests.


  102. By the ABI?
  (Mr Bedell-Pearce) By GAIC.

Dr Jones

  103. Mr Urmston told us Norwich Union have been using all the tests. Why?
  (Mr Urmston) The ABI Code does allow companies to use those tests prior to the fully operational state of GAIC. That is why we have been using them. As I have indicated, it is a very small number.


  104. The small number is irrelevant; it is the principle we are talking about.
  (Mr Urmston) If one reads the Code, one can understand that these tests can be used until they have been fully examined by GAIC.

Dr Williams

  105. It is hugely improper surely where the ABI, which is not a team of geneticists, as the insurers, as the industry, is unilaterally introducing these tests under the advice of just one academic from Nottingham University, with no widespread acceptance amongst geneticists of their predicted potential. Is it not highly improper that the Code of Conduct is out of line completely with the GAIC?
  (Mr Urmston) The Code of Conduct envisaged that those tests would be put before the GAIC very quickly and the situation would be resolved.

  106. This is shoot first and ask questions later, is it not? It is a case of your introducing and using these tests as if they were approved.
  (Mr Urmston) The Code of Conduct did indicate that companies would continue to use these tests but would reverse any decisions made if those tests were subsequently not approved by GAIC.

Dr Gibson

  107. You told me Sandy Raeburn was the man who gave you the information. He advises the ABI and he sits on this GAIC?
  (Mr Urmston) I am not sure whether he sits on the Committee.

  108. He does. He advises the insurance industry too. That is improper.
  (Mr Urmston) He is a geneticist who understands the issue.

  Dr Turner: There is a conflict of interest.


  109. We wish to note that conflict of interest and we will come back to it in our own deliberations. I do not wish to detract from Dr Williams's very penetrating questioning but could I put it perhaps to Mr Bedell-Pearce that there seems to be uncertainty between the three insurance companies here this afternoon as to what the ABI Code currently says. Not only is there uncertainty about what it says; there is a different approach to applying the Code. Whereas Mr Urmston's company, Norwich Union, applies the Code liberally, the Prudential Assurance Company is more generous and only applies a little bit of it. Are we seeing quite a difference between the three insurance companies here this afternoon?
  (Mr Bedell-Pearce) You have in front of you the spectrum of application of the Code. So far as the Code itself is concerned, I do not think there is any confusion. There certainly is not in my mind. Paragraph four of the Code says that only GAIC approved tests may be taken into account by insurance companies in underwriting proposals. Paragraph 33 of the Code says that, as an interim measure, certain tests which were already in use prior to the GAIC being set up may be used by insurance companies but need not be used by insurance companies, subject to there being a revisiting of the underwriting of those cases, where subsequently the GAIC refuses to admit those. It is quite explicit in the Code itself.

Dr Williams

  110. I can sense that there is something improper here where academic geneticists come to certain conclusions. They want those conclusions to be applied in a proper way to the benefit of society and to your own insurance companies. GAIC is an arm of government; it is part of the Human Genetics Commission, but as a body the ABI seems to be in a freelance situation here, in a free market, picking up tests that have channelled through this one academic from Nottingham. He may well believe strongly but nevertheless it is one person's advice, not government body advice. Are we not in a position here where we need unfortunately to introduce that regulation we talked about earlier? There is something discriminatory and unfair in the premature abuse of academic information here when geneticists collectively are not clear. Do you accept that there is some irregularity or impropriety here?
  (Mr Bedell-Pearce) I do not accept there is irregularity or impropriety. At the risk of saying, "We got there first", Professor Raeburn is an eminent geneticist and has been retained for some time by the ABI not because I believe the ABI went expert shopping, but simply because of his eminence and his ability to give a disinterested professional opinion as someone who is both an academic and actively involved in genetic testing.

  111. Do you accept that if his advice is different from GAIC's, GAIC is the arm of government and it is the government's advice that you should be following?
  (Mr Bedell-Pearce) Absolutely.

  112. Why then are you following the advice of this gentleman from Nottingham?
  (Mr Urmston) We will be following the GAIC advice as an industry.

  113. In the interim, you have jumped the gun and you have applied this knowledge, funnelled through this academic, not funnelled through the arm of the government.
  (Mr Urmston) The Code does allow this to occur. The ABI established this Genetic Committee and it is not just Sandy Raeburn who is involved. There is a whole range of academics. It established some tests which they believed had some effect on mortality. The government subsequently, probably at the wish of this Committee, established GAIC. It is an independent body. We are going through a process. Those tests are now all before GAIC and the industry will as a whole be in line as quickly as possible. I do not think there is any impropriety because if there is any question of any policy holder being disadvantaged by this we will change them. There is absolutely no question about that.

  114. It strikes me it is a little premature and, even though you correct errors retrospectively, that individual has been severely disadvantaged.
  (Mr Urmston) To give a little background, the reason the industry as a whole decided to go down this route rather than have a moratorium until these tests were approved by GAIC was that having a moratorium might give an opportunity for people to get a genetic test and get insurance cover quickly.

  Dr Williams: In our earlier inquiry in 1995, Professor Harper gave evidence, as did Professor Bobrow last week and both made the same point very powerfully: that there is really a very poor dialogue, a lack of dialogue, between academic geneticists and people in insurance companies. GAIC is the very body that promotes that dialogue and you should await its findings rather than jump in with two feet before it has had time to give its findings.

  Chairman: Do you wish to respond or do you wish to take note of what has been said? I think you can take note of what has been said.

Dr Turner

  115. Given that you have not only an inconsistency built into your Code of Conduct but a variation in the degree to which it is interpreted through different companies, this does not do anything to increase public confidence in voluntary self-regulation. I take it that the ABI would prefer to be able to operate on a voluntary basis of self-regulation. Do you not think these inconsistencies undermine that?
  (Mr Urmston) We have discussed this very point at some length. The position of companies is to comply with a Code which is a minimum standard. As you can see from the companies here, many of them are taking a more generous approach on the minimum standard. There is nothing to suggest that that is wrong.

  116. It does not seem very regulated, does it?
  (Mr Urmston) If companies are more generous than a regulated position?

Dr Jones

  117. If they are less generous.
  (Mr Urmston) I do not think anybody is being less generous.
  (Mr Bedell-Pearce) We are being more generous in this context. In the case of early onset familial Alzheimer's disease, we will not take note of a positive test but we will take note of a negative test and that has been the case. The prospective policy holder is better off as a result of that. As Mr Urmston said, the ABI Code of Conduct provides a proper framework for moving this forward but it is open in a very competitive environment for insurance companies to give better terms than required by the ABI Code of Conduct. That is what is represented by this spectrum of positions so far as the insurance companies are concerned. There is no confusion about the interpretation. What is happening is different applications of those rules of the Code of Conduct, determined as a matter of policy by the insurance companies.

Dr Turner

  118. The ABI memorandum tells us that, should the GAIC decide that tests you are currently using are not to be approved, you will re-underwrite any policies that you have written on the basis of those tests and ignore genetic testing results equally, whether they are positive or negative. Can you spell out exactly what each of your three companies will mean by that?
  (Mr Clarke) We are not in the position of using genetic test information. The question of back-tracking to November 1998 would not arise in our case. There would be no need to re-underwrite.
  (Mr Bedell-Pearce) Prudential has not underwritten any cases where a positive test has been submitted in relation to these tests which are currently under consideration by the GAIC. Again, like the Co-op, the revisiting on positive tests does not arise. I am not sure what the position would be if the GAIC ruled against a test where we had a negative result and had issued the policy on standard terms. I do not think there is any case for revisiting that because they got what they wanted in the first place. I am not sure about that. It is probably something which was not in contemplation when that particular condition was drafted.
  (Mr Urmston) I have already quoted one case where, from the rating point of view, we would examine it if that was not included. Our position has been generally that, where we have negative genetic tests, we have been prepared to take account of that in giving normal rates.

Dr Jones

  119. What I cannot understand is why the ABI is saying that you will not take into account negative results which could be beneficial to people. That does not seem very logical.
  (Mr Bedell-Pearce) We do not really understand that either. Therefore, we have always taken negative tests into account.
  (Mr Urmston) As a matter of practice, we have allowed negative tests to be taken into account. One can look at the situation and say that, if an office is not able to see a genetic test one way or another, obviously it will set its ratings based on the average. If in practice it then accepts all the negative tests at normal rates, its ratings will be inadequate to cover people who are positively tested. Therefore, the position for the ABI is the minimum standard.

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