Select Committee on Science and Technology Minutes of Evidence

Examination of Witnesses (Questions 120 - 137)



  120. In the CIS's written evidence, we heard you express concern that people might be put off having tests that were perhaps advised by medical advisers because they feared a problem getting insurance. Earlier on, Mr Bedell-Pearce, you also expressed that concern. Mr Urmston, do you share that concern?
  (Mr Urmston) I do. I have supported that perspective. One has to look at the moratorium on the £100,000. There is that possibility there. Anybody will have the ability to receive insurance for that level of cover. As we have commented, if the industry can do more to help those who have positive tests, either by offering improved terms or offering some form of pooling, that will help to remove the perception that insurance is putting people off taking genetic tests, which is mainly a perception if you look at the evidence.

  121. What is the insurance industry needing to do to try and find out whether this is really a problem? You seem to be saying it is a perception, that there is not any validity in it. What evidence have you to justify that?
  (Mr Bedell-Pearce) It is probably the most frequently quoted reason for objecting to insurers taking into account genetic testing but, as the HGAC pointed out in 1997, there was no quantitative evidence to indicate that this in fact was a deterrent effect. Therefore, the conclusion appears to be largely an intuitive one rather than one supported by research. I have also looked at the body of evidence in the United States, where genetic testing is much more prevalent, and again I could find no evidence of quantitative research relating to this except the fact that, if people are asked just the broad question, they do tend to say, "Yes, it would put me off."

  122. That is precisely my point. Should not the industry by carrying out that research?
  (Mr Bedell-Pearce) I think there may be a case for doing that, yes. There is inevitably going to be some difficulty carrying out research of that kind because what I have also discovered is that this is a hugely emotive area that generates a huge amount of emotion and heat. Perhaps the insurance industry, certainly on this side of the Atlantic, has not done itself any favours by having what appears to be a degree of obscurity about its practice and rules; whereas we have attempted on an individual case by case basis to operate on a very open basis and, wherever possible, to give prospective policy holders the benefit of the doubt.

Mr Taylor

  123. That is the key because people think they might lose insurance. Your evidence does not confirm that but you have been woeful in the public explanation, in my view.
  (Mr Bedell-Pearce) I think there is some ground to be made up. That has been very clear to us as we have looked into the wider implications of this. Having inevitably familiarised myself with this whole area over the last two or three weeks beyond what I would normally do, it has become very clear to me that there is a whole range of social and economic factors arising from genetic testing which will have huge significance over the next 20 years or so. We welcome this particular debate and discussion. As a company and probably as an industry, we would like to be involved in this because I think there is a very substantial amount of education that needs to be undertaken within the public as a whole. The implications for such things as the National Health Service, for example, are huge, much larger than the questions of the fine details of underwriting of life assurance policies.

  Chairman: I think Mr Clarke would like to make a comment because there was a quotation from the Co-operative Insurance Society's evidence to us that Lynne Jones was quoting from. You say, Mr Clarke, that your company is concerned about the possible conflict for individuals between undergoing a test as recommended by their advisers and not doing so because of the potential adverse effects for insurance purposes?

Dr Jones

  124. Presumably that is why you have a policy which is more generous.
  (Mr Clarke) The policy is because we believe as a company that we have wider commitments in a social sense. We feel that our approach to underwriting should be more inclusive than exclusive. That naturally leads us to pursuing those kinds of policies. We do make that statement and I would readily concede that it is part of our perception of customer attitude. There is some research evidence that says public opinion is firmly against insurance companies using genetic testing and as part of our social engagement with customers we as insurers also need to be educated about their concerns. The CIS has its own values which it measures by way of dialogue with its stake holder groups, including customers. Although there is no specific evidence at our disposal at the moment with regard to this particular issue, it will be a point we will be taking up within the next cycle of engagement, hopefully trying to get some deeper understanding of our own consumers' thoughts on these particular issues. Were this issue to be revisited in some months' time, maybe we would have had the opportunity of presenting those.

  125. I was very interested that today, out of the blue, both the Pru and the Norwich Union have made comments that the industry must try and do something. You have both suggested some kind of industry wide pooling. Why is it you have only just come up with this today, because you will remember back in 1995 this was one of the recommendations of our predecessor committee. This was one of the suggestions we made and we suggested that the industry should come up with a solution along those lines. Why is it that you are only starting to mention this now; whereas both your companies have gone along with this minimalist safeguard that the ABI have promoted in the Code of Practice?
  (Mr Urmston) The industry has perhaps focused more on the testing and the Code of Practice, which was the main requirement, and less on the communication. I feel that possibly we have failed to communicate properly our practices. We need to do better.

  126. The fact is that your company has been loading its premiums for these tests, some of which have not even had approval of the GAIC. You have not suggested any industry-wide re-pooling until today.
  (Mr Urmston) I have shown in the figures that genetic testing has been beneficial to policy holders so far.

  127. Why not have the same policy as the Co-op, Virgin and Standard Life?
  (Mr Urmston) We are back to the different markets, the point I was trying to draw on earlier, that Norwich Union is competing with some very high sums assured. We are competing in the independent financial advice market, where premium rates are reviewed perhaps three or four times a year. You can see that that market is somewhat different and that is what brings the different positions of the companies to this table.

  128. Our predecessor committee suggested that there should be a different arrangement for those high sums but for your average type of amount there should not be any requirement to reveal genetic tests unless it is to the individual's advantage. Why does that not make sense?
  (Mr Urmston) That is what we have done with the £100,000 limit.

  129. Only for mortgage insurance.
  (Mr Urmston) Norwich Union applies it to other life policies.

  130. You anticipate continuing that?
  (Mr Urmston) Yes.
  (Mr Bedell-Pearce) The ABI Code of Conduct does require insurance companies which would otherwise decline insurance as a result of positive genetic tests to provide some sort of insurance, perhaps excluding the stated condition or limiting the term. At the moment, with the size of the volume of cases coming in, you probably could not create a pool.

  131. It is the principle which is of reassurance to people, is it not?
  (Mr Bedell-Pearce) It is. That is the thing which has prompted us. Dare I say it: there is nothing like an appearance before a select committee to focus the mind on things like this. We do consider our policy on these matters. The volume of genetic tests going through our business is very small indeed. We have come to realise that in the context of the implications of this, particularly the deterrent effect, we should do something as an industry to remove that deterrent effect if that is going to be practically possible.

Dr Iddon

  132. I want to look at the next five or ten years. We are expecting an explosion in genetics research out of which might arise, and probably will arise, the development of more tests of the kind that we have been discussing this afternoon and will bring in more common disorders such as heart disease and more cancers than you have mentioned already. Genetics is only one factor. Lifestyle and other factors also play a part. My concern is that you may cherry pick customers eventually. I know what the ABI Code says about not lowering premiums but can I put it to you that I am a non-smoker and I get a better premium than those people who puff cigarettes every day. The industry is already cherry picking. I submit that eventually you will be forced into cherry picking as a result of increased reliability and increased availability of genetic testing. I wonder if you would like to comment?
  (Mr Clarke) It is a question of speed of development and one's perception as to how some of these tests will develop to the extent that they can be quite as predictive as the example we have already seen of Huntington's disease. What I mean is they will provide a quantum of extra information over and above what we have seen through normal family history. Our own expectation with regard to life assurance is that we would wish to hold our position of not wanting to use genetic testing information for as long as we possibly could. However, if there was widespread use of genetic information by competitors and widespread adverse selection, we would have to look at our own particular position because we would be seriously and materially affected. For what it is worth—I am not a scientist—I do not believe that in the field of life assurance genetic tests will proceed at such a pace over certainly the short and medium term, but it will get to that kind of position that you are speculating.

  133. If the pace was quicker than you are anticipating, what would prevent a company breaking loose and going off at a tangent?
  (Mr Clarke) Assuming it was allowed within the Code and all these tests were permitted, you would be looking at some kind of armageddon situation where the medical evidence was sufficiently reliable that we could almost tell the date, time and place of one's own demise and that would fundamentally ruin the fabric of the insurance industry and the basis for its existence.
  (Mr Bedell-Pearce) I suspect it would ruin the fabric of society as well.

  134. I have listened to the evidence from Professor Bobrow and yourselves this afternoon very carefully. My personal conclusion is that there are so many uncertainties—I am not convinced that even the Huntington's chorea test is so predictive as you say and in Professor Bobrow's evidence we saw that—and we raised the question of a moratorium with Professor Bobrow. He pointed out that the industry had had quite a long time to produce a voluntary moratorium which is not coming, clearly. We pressed him further and he felt that it was unavoidable that government might have to produce legislation to control the industry in the not too distant future. In order to restore public confidence in the insurance industry, would it not be in your best interests to stand back for a few years, two at the very least, and forget genetic testing until we have more reliable data?
  (Mr Urmston) What we have tried to demonstrate in today's meeting is that there is a moratorium of £100,000 cover or less and that is the reality of the United Kingdom position today.

Dr Jones

  135. Only for mortgage insurance.
  (Mr Urmston) That is the main reason people are buying life insurance. There are other views around. There was a discussion some two years ago about whether the current Code was better or worse than a moratorium or a full moratorium up to a certain level of cover. There has to be some limit to that because of the adverse selection point that we have discussed. The debate which went on at the time said that there was a number of issues there. A moratorium might increase the demand for genetic tests, firstly. There would be a whole scale increase in demand for genetic tests which I do not think the NHS necessarily would be able to cope with. The impact would be that people may want to get genetic tests while there was a moratorium in place prior to getting insurance because the moratorium would then run out and the industry would be able to rate on the basis of genetic tests. The idea of a moratorium almost encourages people to buy while stocks last.

  136. Is it not in the industry's interest for people to have genetic tests so that they can take prophylactic action? Are you not cutting off your nose to spite your face?
  (Mr Urmston) I am just trying to give an indication of the sort of arguments that went on about a moratorium at that time. These were not insurance experts. They were people who were looking at some of the genetic interests and the ethical issues. There was also an issue around the counselling to give when people are considering a genetic test. We should try and avoid insurance being part of that advice. Many people, if faced with the decision of taking a genetic test, I do not think go ahead with it because of the advice that they receive. The fact that there is a moratorium might encourage them to take a test. It actually works the other way.


  137. We have come to the end of our evidence session. Before I close, from the memorandum we had from the Royal Society, they did say: "A statement from the ABI that research results will not be used, and need not be declared, would be very helpful." I wonder if I could ask each of you in turn whether your individual companies would be willing to make such a statement or to consider, after this afternoon, the possibility of making such a statement. Research results of course are results where academic scientists working in genetics are trying to push forward cures for hereditary diseases. If those who are volunteering for research are going to have the research results taken into account in their own individual insurance policies one could understand, I am sure, how the research into such things as Huntington's, Parkinson's, Alzheimer's and so on could be set back. Am I asking too much when I ask that the ABI think of making a statement along the lines that I have suggested?
  (Mr Bedell-Pearce) I do not think so. As a company, that is our position. We will not take into account the tests arising from an individual participating in a research programme. I will certainly ask my colleague to put on his shopping list when he goes back to the ABI Genetics Committee this particular point.
  (Mr Clarke) We would not want to discourage anybody from participating in valuable research exercises, so we would be supportive of any initiative that the ABI would come up with.
  (Mr Urmston) Absolutely. Indeed, the ABI Code envisages that only certain tests will be approved and anything else we will not use or support.

  Chairman: Gentlemen, you have been very helpful to this Committee's inquiry into genetics and insurance. We have learned a lot from you and we hope that, in a little way, you might have learned something from coming here this afternoon. I am reminded of an expression I learned years ago that academic books are written for the benefit of the author, but I had not realised until this afternoon that select committees are for the benefit of the witnesses. Thank you very much indeed for the way you have helped us this afternoon and for the thinking that you have all done before coming here, thinking that in a busy life you do not always have time to do. You have paused to reflect upon the issues that we are discussing and it is quite clear that you are taking this matter very seriously. We thank you for that and we thank you for what you will continue to do in this area in the future. Finally, if you have any thoughts after you have left here about the issues we have discussed this afternoon, please do not hesitate to write to us with further information if you think it is right that we should have it. On behalf of the Committee, may I thank you all for the preparation you have put into this afternoon's meeting, for coming here this afternoon and for being so very helpful to us. Thank you very much indeed.

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