APPENDIX 25
Memorandum submitted by Barclays Life
Assurance Company Limited and Woolwich Life Assurance Company
Limited
1. INTRODUCTION
Barclays Life and Woolwich Life are the insurance
companies serving customers through the Barclays Group and have
in excess of 11/2m life assurance and pensions contracts in force.
Many Barclays customers purchase insurance to protect their Barclays
mortgage arrangements (an area of specific concern to the Inquiry),
though customers purchase contracts to meet a wide range of needs
through the Barclays advisers. Barclays therefore carries a wider
concern than that of an insurer to ensure that all customers are
fairly and appropriately treated.
While Barclays seeks to offer customers competitive
contracts it is equally fundamental to customers' interests that
its insurance companies be run in a secure and prudent manner,
part of which is that its underwriting standards are appropriate
and fulfil their objective to provide insurance at a fair price.
2. DETAILED QUESTIONS
AND RESPONSES
Q What is your policy toward the use of genetic
test results, and what are the reasons underlying it?
Barclays Life and Woolwich Life fully supports
and complies with the ABI Genetic Code of Practice. As such therefore,
we do not request that individuals submitting a proposal for insurance
should undertake genetic tests of any description.
Individuals will have chosen to submit to genetic
tests on their own account, presumably under the advice of their
medical experts. Clearly for any individual who has previously
taken a genetic test, there are instances, specified by the ABI,
where evidence may be taken into account.
For applications to provide mortgage life insurance
cover, Barclays does not take into account any adverse genetic
test results where the sum assured proposed is £100,000 or
less.
Commercial reasonableness demands that a submission
for insurance by a customer has to be made on a basis of equal
knowledge between the proposer and insurer. For the insurer this
is a commercial decision between on the one hand, the competitive
costs incurred in investigating this information, and on the other,
creating a product demonstrating fairness in charges between customers.
We believe that our approach meets those demands.
Q What scientific advice have you based your
decisions upon, and how reliable do you consider it to be?
Our underwriting standards and individual decisions
are based on the widest industry information. In particular we
use reassurance manuals from major international firms whose recommendations
are based on their own extensive data, both United Kingdom and
overseas. In many cases our contracts will be reassured and hence
our underwriting must meet standards acceptable to them also.
In addition, we are fully aware of other relevant writings from
knowledgeable underwriting medics such as those of Brackenridge.
Individual cases involving genetic tests are discussed with our
Chief Medical Officer and with our underwriter nominated under
the ABI code as the Nominated Genetics Underwriter. Professor
J A Raeburn, the genetics advisor to the ABI, is also available
for consultation on specific cases. Medical underwriting when
combined with actuarial rating standards determine the premiums
for contract offers.
Q 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 upon?
We believe that the ABI code of practice contains
the necessary flexibility to adapt as genetic knowledge evolves
but clearly the use in future of emerging new genetic tests would
be dependent on the ABI ascertaining their approval by the Genetics
and Insurance Committee and thence their relevance to medical
underwriting. We do not believe that tests for diseases which
are not single gene defects will be used in the foreseeable future.
Currently, were we to learn of a genetic test
result, not on the prescribed list, then unless the result gave
a direct benefit to the proposer (ie in their favour), we would
not take account of the information given by that test.
Q How effective do you feel the current regulatory
system is?
Barclays has no reason to doubt the effectiveness
of the current system of regulation by the ABI:
— The Managing Director has to certify
our compliance with the code annually.
— Compliance with the code is a condition
of membership of the ABI.
— Our Chief Medical Officer and our
Nominated Genetics Underwriter will view every case featuring
a genetic test.
— Applicants have a right of appeal
where they consider themselves wrongly treated.
We therefore believe that the code imposes on
the industry a strict set of controls and checks.
3. OTHER COMMENTS
The ABI code is fully supported by Barclays
as we believe that it represents an appropriate balance between
the respective interests of society in general, and those of our
existing and prospective policyholders.
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.
Without doubt it is necessary to keep developments
in genetics under continuous review. Barclays therefore fully
supports ABI in this role. Barclays Life is a member of the United
Kingdom Forum for Genetics and Insurance.
Barclays has recently announced an alliance
whereby it will retail (from a date yet to be specified) the products
of Legal & General Assurance Society Limited. It is our understanding
that Legal & General also subscribe to the ABI Genetics Code
of Practice.
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