Select Committee on Science and Technology Minutes of Evidence

Memorandum submitted by Prudential plc

  We understand this is an area of public concern. However, it is our belief that the UK industry, including Prudential, has acted with integrity in its approach to these sensitive matters.

  Genetics is still relatively new and decisions taken now could have profound implications for the future. The way forward is through consultation and agreement based on an understanding of the issues we face.

Q1.   What is your policy towards the use of genetic test results, and what are the reasons underlying it?

  Our policy is based on compliance with the Association of British Insurers Genetic Testing Code of Practice.

  Amongst the key elements of the Code of Practice are:

    (a)  an applicant for insurance will not be asked to take a genetic test as a condition of offering insurance;

    (b)  to take into account only those genetic test results approved for use by the independent Genetics and Insurance Committee (GAIC);

    (c)  the test results approved by GAIC will only affect applications for insurance where they show a clear increased risk of genetic disease and the result is relevant to the application in question;

    (d)  to seek expert medical advice when addressing the impact of a genetic test result on individual applications for insurance;

    (e)  if the genetic risk appears too great to insure, we will try to offer a constructive alternative;

    (f)  the result of a genetic test will not be used to underwrite another member of the family;

    (g)  strict rules of confidentiality and security covering genetic and other medical information; and

    (h)  genetic test results need not be shown in new applications for life insurance for sums up to £100,000 which are directly linked with a new mortgage.

  The reasons underlying the use of genetic test results relate to the basic principles of insurance, this is the payment of premiums which create a fund from which likely claims can be met. The individual premiums are set in accordance with the risk brought to the fund. The competitiveness of the industry allows the applicant to seek the best premium rates on offer.

  Relevant genetic test results, by definition those approved by GAIC, like other forms of medical information provide insight into the risk presented. Our purpose in using these genetic test results is to allow fair assessment of this risk. If this right of access to test results were lost, the fund would be exposed to anti-selection from individuals who could at worse, over insure or at best, pay a premium not truly reflecting the risk brought to the fund. In the longer-term the likely outcome of this would be higher premiums for all.

  Insurers also have a responsibility to protect the interests of existing members of the Fund from exposure to anti-selection. Customers have the right to expect their policy to pay out in the event of a claim.

Q2.   What scientific advice have you based your decision upon, and how reliable do you consider it to be?

  Any application for insurance which includes the result of a genetic test is reviewed by our Nominated Genetics Underwriter (an individual appointed at the suggestion of the ABI). In the case of Prudential, this is our most senior practising underwriter with over 20 years' experience in his profession. He would then consult with our Chief Medical Officer prior to reaching a decision.

  In the event an expert opinion is required to interpret the risk presented, we would consult with the ABI's appointed Genetic Adviser.

  In terms of the risk presented by adverse genetic test results we rely on the statistical interpretation provided by Reinsurance Companies in their underwriting guidelines, medical literature, papers and research bulletins provided by the ABI's Genetic Adviser and attendance at relevant seminars and conferences.

  It is our belief that all these sources of advice are very reliable and form the best available basis for providing fair and accurate assessment of risk.

  Prudential, along with a number of other insurers, are currently supporting and funding independent actuarial research being undertaken at Heriot-Watt University into the impacts of genetics on insurance. Whilst the results will be for public consumption we hope they will provide us with greater understanding and guidance.

Q3.   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 on?

  We do accept the use of genetic test results for Huntington's disease subject to the restrictions outlined in the answer to Q1. It should be noted this applies equally to negative test results as well as positive.

  Further applications have been made by the ABI to the GAIC covering the use of genetic test results in relation to early onset Alzheimer's disease and Breast/Ovarian Cancer. These applications have been made in the belief they will meet the strict criteria set out by the GAIC for use of genetic tests by the insurance industry. We shall accept the ruling of the GAIC and if the tests are passed we would use them in our assessments.

  Any prior assessments made on the basis of the above-mentioned genetic tests which are rejected for use by the GAIC will be revisited back to 1 November 1998 in accordance with ABI guidelines and any increase in premium imposed refunded. Our records at the Prudential indicate we have no such cases at present.

  It is our understanding that there are no non-single gene defects which would currently meet the GAIC criteria. It is far less clear whether polygenic disorders, some associated with common causes of death, will affect life assurance significantly. The epidemiology is also less conclusive because of lower levels of risk and the influence of other factors such as lifestyle and environment.

  If actuarial data were to emerge from research which demonstrated a relevant and quantifiable risk, this position would need to be reviewed. In any event, any use of such tests would still be subject to the process of application to the GAIC and again we would stand by their decision.

Q4.   How effective do you feel the current regulatory system is?

  The regulatory system which governs the use of genetic test results by the insurance industry in the UK, is contained within the ABI's Genetic Testing Code of Practice.

  The Adjudication System which relates to any complaints or breaches is a cornerstone of the Code. An independent Tribunal sits at the head of this process, their findings are binding on ABI member companies. Indeed, it is a condition of continuing ABI membership that insurers abide by the rules of the Code at all times.

  The CEO of an ABI member company is required to sign an annual statement confirming compliance to all aspects of the Code. These statements are subject to careful scrutiny by the ABI. Prudential comply with this requirement and were last year given recognition from the ABI for demonstrating good practice.

  Having the Rules contained in a Code of Practice rather than backed by Statute has allowed the Code to develop regularly in response to advances in genetics and any fresh concerns raised by interested parties. The Code was welcomed by Government following the Human Genetics Advisory Commission report on insurance and genetics. We and the industry look forward to supporting and providing input to the work programme of the new Human Genetics Commission.

  In the Code we have an internationally recognised model for dealing with the sensitive issues of genetics and insurance. In short, a sensible and effective regulatory system, accepted across the UK insurance industry with the power at its disposal to ensure those in breach of the Code face stiff penalties and meaningful sanctions.

22 January 2001

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 3 April 2001