Examination of Witnesses (Questions 100
WEDNESDAY 7 FEBRUARY 2001
100. Generally, before you use the results of
these tests, should you not wait for detailed approval by the
(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
102. By the ABI?
(Mr Bedell-Pearce) By GAIC.
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
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
107. You told me Sandy Raeburn was the man who
gave you the information. He advises the ABI and he sits on this
(Mr Urmston) I am not sure whether he sits on the
108. He does. He advises the insurance industry
too. That is improper.
(Mr Urmston) He is a geneticist who understands the
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
(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.
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
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.
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
(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
117. If they are less generous.
(Mr Urmston) I do not think anybody is being less
(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.
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
(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
(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.
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.