APPENDICES TO THE MINUTES OF EVIDENCE
APPENDIX 1
Memorandum submitted by AEGON UK
1. AEGON UK is a life insurance and pensions
organisation operating within UK, inter alia, through its
main risk-product issuing subsidiaries Scottish Equitable plc
of Edinburgh and the Guardian life insurance and pensions businesses
of Lytham, Lancashire. AEGON UK is in turn a wholly owned subsidiary
of AEGON nv of the Netherlands. UK executive management has freedom
to pursue any legal course of action that they deem appropriate
to the proper functioning of the business and in the best interests
of the general body of its policyholders.
2. This memorandum is written in response
to Mr Geoffrey Farrar's invitation of 11 January 2001 for Scottish
Equitable plc to explain what we believe to be the significant
issues surrounding the use of genetic test results by insurance
companies. Because of the common interest of Scottish Equitable
plc and the other subsidiaries we have included in this response
all of AEGON subsidiaries that issue policies in the UK covering
against death, critical illness or sickness risks.
(i) Our policy regarding the use of
genetic test results and the reasons for it
3. It is our shared corporate philosophy
that—in underwriting risks applied for by persons at a time,
of a kind and for an amount of their own choosing—an insurer
should not be excluded from information already known to the life
to be insured that is relevant to a proper assessment of the risk
to be borne.
4. In relation to genetics there are three
reasons to do with risk control for this philosophy:
(a) the information may concern a genetic
susceptibility to future disease and/or to shortened life expectation
which must influence an insurer's assessment of the risk that
is to be insured;
(b) knowledge of the implications may influence
the individual to put in place insurance which he or she may not
otherwise have done; and
(c) if the contract term extends through
the typical years of onset of the condition the insurance will
be against the certainty of an event that rather than against
the possibility of an event (whilst paying a premium based on
the mere possibility if the insurer is unable to have access to
the relevant information).
5. In the absence of genetic information
it is possible to form an estimate of an additional risk by use
of "family history". If an individual has been tested
at his own behest by use of an appropriate, reliable and approved
test and is found to be negative for the genetic defect then we
agree that the individual is not at risk for that condition and
if we are permitted the use of existing genetic test results we
would agree that an extra premium based on a family history of
the condition should not be charged.
6. We agree that insurers should not require
applicants to be tested for genetic mutations.
(ii) What scientific research have
you based your decisions on and how reliable do you consider it
to be?
7. ABI membership has had, and continues
to have, the benefit of the expert advice of ABI's genetics adviser.
AEGON UK is delighted that the GAIC has been set up to examine
a rigorous case for insurers' use of existing predictive tests
results for each of certain severe medical conditions which result
from genetic mutation. A separate case is presented for each kind
of insurance contract for which the existence of the genetic mutation
in an asymptomatic individual presents an additional cost at a
level that it is not reasonable (with the agreement of GAIC) to
absorb into the standard rate.
8. Each case presented to GAIC is based
on published professional genetics research material.
9. The very few decisions that have had
to be made by us until now have been made in accordance with the
published (by ABI to members) or specific advice of ABI's genetics
adviser in accordance with ABI's Genetics Code of Practice.
(iii) The use by us of test results
now and in the future
10. We feel that it is important for the
life assurance industry to be able to react sensibly and appropriately
to developments as they occur. We are conscious that each of us
is merely the expression of our genes and that many, or all, of
us will carry defective genes but will suffer no harm—or
if we do it may be quite unclear as to what gene or genes have
interacted with what trigger or triggers to precipitate a significant
medical condition.
11. The less likely that a mutation is to
express itself the less likely it is that an individual seeking
insurance will have been tested predictively beforehand and the
less meaning any such test would have in reality for the individual
or for an insurer. It may be that if a clear gene combination
giving rise to significant mortality or morbidity were found—with
or without an identifiable trigger such that a predictive test
became available an individual who had been tested (a) will presumably
be aware of the possibility of future illness and (b) how to reduce
its likelihood by avoidance of the trigger circumstances—and
(c) they would also know if they were taking steps to avoid or
exacerbate the risk. If such a scenario were to arise in future
the best-placed body to assess the appropriateness of insurers
having access to test results already known to applicants must
be GAIC.
(iv) How effective do you feel the
current regulatory system is?
12. We feel that a sound system is evolving
around ABI and GAIC. It has to be in the interests of insurers
and the insuring public that there is "nothing to hide"
and that underwriting practice is fair to applicants and insurers
and seen to be fair in the context of what is voluntary, on application—not
compulsory—life assurance.
19 January 2001
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