Select Committee on Science and Technology Appendices to the Minutes of Evidence


Memorandum submitted by Legal & General Group Plc


  1.1  Legal & General is one of the UK's largest insurance companies. It is a leading provider of life assurance, critical illness and income protection policies. In conducting its business, Legal & General recognises its responsibilities to society in general, to its policyholders and to its shareholders.

  1.2  It seeks both to offer competitive terms to its policyholders and to run its business in a sound and prudent way in order that it remains solvent and can meet its policyholders' reasonable expectations. The use of appropriate underwriting standards, which evolve over time, is one of the cornerstones of sound and prudent management.


  2.1  The human genome project is leading to more information to which people could have access concerning their own genetic profile. This could lead to behavioural changes in a number of areas, including aspects which could, in time, affect the level of insurance claims and purchasing intentions for insurance. The amount and quality of this information will increase over time.

  2.2  Your committee has in the past expressed concern that people might be deterred from taking genetic tests if they knew that adverse results might affect, in some circumstances, the cost or availability of insurance. Life insurance in connection with house purchase has been highlighted as an especially sensitive area. This concern is recognised by the insurance industry in general and Legal & General in particular. For this reason the Association of British Insurers (ABI), after consultation with genetics interest groups, has produced an extensive Genetics Code of Practice. Legal & General fully supports this code and adheres to it.

  2.3  Forbidding the use of genetic information by legislation could produce a situation in which people who have had tests, which reveal them to be at high risk, can over-insure themselves and avoid underwriting assessment. The result could be considerably higher insurance premiums for everyone. A similar argument would apply to any restriction to underwriting practice.

  2.4  There is a policy dilemma for insurance companies. In the absence of full and accurate disclosure of information, proper evaluation of risk cannot take place. Insurance companies could be "selected against" by people who know that they are more at risk and would, therefore, benefit by being able to take out high levels of insurance at a price effectively being subsidised by all policyholders. Applicants would question the reasonableness of arrangements which allowed good reason. It would also undermine the principle of utmost good faith on both sides, on which insurance is based.

  2.5  Insurance companies will not delay the development of genetic science. In time, new genetic tests may be available and become accepted as comparable with all other information currently looked at by life insurers in evaluating risks, such as family history, doctors' reports and medical test results. However, this will depend on the way in which genetic tests develop.

  2.6  Legal & General believes that developments should be kept under careful review by the industry and that discussions with geneticists should be encouraged on emerging issues. Legal & General believes that this would best be performed centrally by the ABI. In addition, it continues to ensure that its knowledge expertise of this rapidly developing area is kept up to date. It is a member of the United Kingdom Forum of Genetics and Insurance (UKFGI), its Chief Medical Officer (CMO) is a member of the ABI Genetics Committee and one of its actuaries was a member of Faculty and Institute of Actuaries Genetics Working Party.


 (i)   What is your policy toward the use of genetic test results, and what are the reasons underlying it?

  3(i)1  Legal & General fully supports and complies with the ABI Genetic Code of Practice. Accordingly, we do not ask applicants for insurance to take genetic tests of any description. The decision whether to have a genetic test is up to the individual, with advice from his/her medical experts.

  3(i)2  The results of some genetic tests, specified by the ABI who seek approval from the Genetics and Insurance Committee (GAIC), may be taken into account, but only when someone has already had the test before applying for insurance. However, for applications for mortgage-related life insurance up to £100,000 sum assured, Legal & General does not take into account any adverse genetic test results.

  3(i)3  In many cases, disclosing a previous genetic test result can benefit the applicant. An applicant whose family has suffered from a genetic condition, and who has not had a test, might not be insurable. However, an applicant who discloses a previous negative (ie favourable) test result, showing that he/she has not inherited the condition, and who is otherwise in good health, would be insurable on normal terms.

  3(i)4  The reason why Legal & General fully supports the ABI stance is that it believes it strikes a suitable balance between the interests of Society in general and those of its existing and prospective policyholders.

 (ii)   What scientific advice have you based your decisions upon, and how reliable do you consider it to be?

  3(ii)1  In making medical underwriting decisions, the medical underwriter will take into account information from a great number of medical and other sources of information (eg "Medical Selection of Life Risks—R D C Brackenridge (MD FRCP) and W J Elder (MB BS MRCP DCH)" and Reassurance Manuals based on extensive data from both the UK and overseas). Individual cases can then be discussed with one of our medical officers who are qualified doctors with different areas of speciality who have access to medical colleagues.

  3(ii)2  The ratings themselves are calculated on bases set by our actuaries which take into account the level of risk the applicant brings to the fund.

  3(iii)3  Applicants for new policies may then be accepted on normal terms, rated or declined according to the assessment of the medical evidence provided. Legal & General believes that this basis is fair and properly utilises the medical information and is therefore reliable.

  3(ii)4  Genetic testing can bring more information into the decision making process. Legal & General accepts that as yet few tests provide enough information to enable reliable underwriting decisions to be taken. Therefore, it follows the ABI Genetics Code of Practice and only takes into account the tests specifically approved by the Code.

  3(ii)5  As already stated, Legal & General does not ask applicants to undergo a genetic test but if one of the approved tests is provided we would take it into account as we would any other relevant information. All these cases are referred to our Chief Medical Underwriter who is the Nominated Genetic Underwriter (NGU) under the ABI Genetic Code of Practice. These cases are always referred to our CMO. As a member of the ABI Genetics Committee he can discuss the implications of the specific genetic test results with his colleagues including the geneticist, Professor J A Raeburn. As the committee represents considerable genetic expertise and given that considerable information is known about the prognosis for the few genetics tests which are used, we would consider that our underwriting decisions are reliable.

 (iii)   The GAIC recently approved the use of results from the Huntingdon'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 upon?

  3(iii)1  Legal & General believes the Code includes the flexibility needed to ensure practice can adapt as knowledge of genetic science increases. Legal & General does generally accept the use of the genetic test results specified by the ABI, where these genetic tests have been taken prior to application (eg Huntingdon's Disease). The future use of other genetic test results would depend on the ABI ascertaining their pertinence for medical underwriting and approval by the GAIC.

  3(iii)2  If an applicant provides us with a genetic test result, the particular test not being on the prescribed list, then we would not take the test results into account unless it counted in the applicant's favour.

  3(iii)3  The question as to when we would use other tests is dependent upon such tests being developed, then being approved by GAIC and subsequently allowed by the ABI.

  3(iii)4  The future use of genetic tests for diseases which are not single gene defects depends on the same criteria as for the other single gene tests, as just stated. We do not believe that these will be used in the foreseeable future.

 (iv)   How effective do you feel the current regulatory system is?

  3(iv)1  Legal & General does feel the current regulatory system is effective. The current system imposes strict controls on the use of genetic tests by the insurance industry. Further, the ABI Code gives an applicant the right to appeal. Our Chief Executive Officer has to confirm compliance with the Genetics Code of Practice on an annual basis. Compliance with the Code is a condition of ABI membership.

  3(iv)2  Every case containing a genetic test result is referred to the NGU and the CMO; the NGU is registered with the ABI. The NGU and CMO are obliged to keep up to date with genetics by use of, for example, ABI circulars, briefings, industry updates and seminars.

22 January 2001

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