Genetic testing creeps into underwriting

By Carine Sroujian | October 20 2003 03:07PM

As genetic research opens the door to better understanding and possibly predicting inherited diseases and disabilities, insurers want to maintain their access to genetic information to help them better manage risk.

Insurers say the results of genetic tests should be accessible and used just like any other piece of underwriting information. While law specialists agree that insurers should have access to existing information, they highlight the need for this accessibility to be regulated, and are adamant that genetic testing should not be an underwriting requirement.

Insurers are far from imposing genetic testing as a requirement for issuing policies since it is still in its preliminary stages, and there are unknown costs associated to having clients undergo these tests.

Law specialists have more ethical underlying reasons for deeming these tests unacceptable because they consider this to be an infringement upon individuals’ rights.

Impose testing

Frank Zinatelli, Associate General Council at the Canadian Life and Health Insurance Association (CLHIA), states that it is too early to tell whether insurers will ever develop their own testing. He explains that the industry is still not convinced of the predictive nature of this information concerning insurance.

“The industry really thinks that you have to pay attention to the scientific developments in this area, the related costs to having these tests done… It’s really unclear just how useful it would be for insurance purposes,” he adds.

Trudo Lemmens, Professor of Health Law and Policy, Faculty of Law and Department of Medical Genetics and Microbiology at the University of Toronto, says there are many reasons to be concerned about allowing insurance companies to push people to undergo genetic testing.

“Giving insurance companies the power to impose that form of testing is problematic. Many people don’t want to undergo that kind of testing. These are health care decisions or personal decisions that shouldn’t be pushed forward for financial security.”

Mr. Lemmens wrote his doctorate on genetics and insurance and is currently on research leave working at Princeton University’s Institute for Advanced Studies. He explains that there is still a lot of uncertainty around genetic testing and that there are only a few genetic tests available that would be of interest to insurance companies. “I think they can handle their business without having to introduce genetic testing,” he adds. “I think they will be more inclined to have access to genetic information in medical files.”

“If you ask somebody if he or she has breast cancer or heart problems in the family, you’re asking for genetic information.” — Trudo Lemmens

Adverse selection

The life insurance industry considers it appropriate that people aware of genetic abnormalities, which may affect their insurability, disclose this when applying for insurance. Otherwise, when a claim is made and this information is discovered, the contract may be voided.

According to CLHIA’s recently published position statement on genetic testing, “Current industry policy is that insurers would not require an applicant for insurance to undergo genetic testing. However, if genetic testing has been done and the information is available to the applicant for insurance and/or the applicant’s physician, the insurer would request access to that information just as it would for other aspects of the applicant’s health history.”

Mr. Zinatelli says the concern arises when an individual has access to this information and purchases a policy or policy amount because of that knowledge. “In that case, there could be something which is called ‘adverse selection.’”

“As a company and as an individual, I have no interest in developing our own genetic information on people,” maintains Bruce Empringham, Vice-President and Medical Director at Great-West Life. “We’re not now or we don’t ever, at least in the foreseeable future, expect that as an industry, we would ever want to be doing genetic testing on people.”

However, Dr. Empringham says he looks at genetic results as just another piece of underwriting information that might or might not represent a certain amount of risk. “I don’t like to think of genetics as sort of this separate chunk of yucky stuff that nobody wants to talk about, which is sort of sometimes how it is. It adds or takes away risk,” he adds.

Dr. Empringham explains that insurers need to know all the information clients know in order to underwrite them fairly. “If not it creates anti-selection,” he says. “It basically means it’s an unequal playing field: the clients that have adverse information about their health will apply for more insurance.”

Most often, he continues, the genetic information that he receives comes when a client has a family history of an illness and the genetic results prove the client does not. “Most of the time when I see these tests it is in a situation like ‘my mother had breast cancer, I went for testing, and I don’t have the gene.’”

‘Good faith’ contract

Mr. Zinatelli says that adverse selection is unfair because, by insurance law, both the insurer and the prospective insured should have the same knowledge when entering into an insurance contract.

“An insurance contract is what is generally called a contract of ‘good faith,’ and that’s why the individual is required to disclose all relevant information just like any other medical information, and genetic testing may be relevant to the application for insurance.”

Mr. Zinatelli affirms that the principle of good faith is included in the insurance legislation in each province and the contract is void if any relevant information is withheld or misrepresented. He further explains that the client has every right to refuse, but the insurer consequently has the right to turn that client down for insurance.

“If ever I know that there’s some information that the client will not reveal or has instructed their doctor not to reveal, then my action is to not accept the application for insurance,” reveals Dr. Empringham. He further explains that the concealed information can sometimes be found on a doctor’s file.

Diana Park, Chief Underwriter at Standard Life, says that an insurer would need to know this information in order to properly assess and classify the risk. “At the moment, we have no access to this information without the authorization of the client and it’s a concern for insurers. If there’s information that’s going to be withheld, we would have to look and see what the impact would be on our pricing.”

Privacy Issue

Harold Geller, Lawyer and Partner of Milton, Geller L.L.P law firm, says that the new Personal Information Protection and Electronic Documents Act (PIPEDA) does not specifically speak about the issue of access to genetic information. But he explains that, under the Act, insurers do need to define the purposes for which the information will be collected and used and get specific informed consent.

“That’s something that insurers don’t like to do; they just want to collect the information,” says Mr. Geller. “They don’t want to put their pen to paper and say to the public exactly why they’re doing this.”

“There are very few agents out there who would understand the complexity of the issue. I doubt that insurance agents based on the information that’s out there right now could possibly advise their clients and get their informed consent.” — Harold Geller

He says that a broad consent will not be sufficient under PIPEDA. “If they say ‘we’re going to take a blood sample because we want to do genetic testing’, the average person would not understand what they meant. What rights were they waiving? What is the level of intrusion?” he asks.

Is genetic testing going to be used for discriminatory purposes? “Absolutely!” says Mr. Geller. “That’s what underwriting is. You weed out the people you don’t want. Is it an acceptable form of discrimination? Is it justifiable in a free and democratic society?”

He explains that it would only be just if it were conducted under clear guidelines, independently drawn up, which could relieve the public and the individual of fears of misuse of information. “If the information were to only be used for the purpose it was garnered for and if there was clear communication to the individuals so the informed consent can be obtained under PIPEDA, I don’t see it as a wrong,” he adds.

But we are not there yet, he says. Right now, Mr. Geller sees this as unacceptable. “What hasn’t happened yet is a lot of litigation on private contracts in the Charter [of Rights and Freedoms] and this is the type of thing that could be the flashpoint.” He says this issue will take at least five to ten years to be resolved.

Mr. Geller says that insurers already use information that might be deemed discriminatory under any other circumstance. “An insurer is perfectly entitled to inquire into your family’s personal history. That is considered a proper investigation. Where does genetic information come on which side of the line?”

He adds that there is certain information that insurers do not dare collect because they know that it will get them in trouble. “They would not ask someone what religion they are, for example. Genetic mapping is not that different in the eyes of the public. They see it as something that’s overly intrusive and unnecessary.”

Mr. Lemmens agrees that, in a way, insurance companies already have access to some form of genetic information. “Genetic information is such a wide term that it covers things like age, sex or family history. If you ask somebody if he or she has breast cancer or heart problems in the family, [then you are asking for] genetic information. Current practice is already that insurers will use that information to set premiums,” he adds.

Also, explains Mr. Geller, the agent who sells the contract has the duty to explain this whole concept of genetic testing to the client in order to get their informed consent. “There are very few agents out there who would understand the complexity of the issue. I doubt that insurance agents based on the information that’s out there right now could possibly advise their clients and get their informed consent.”

Legal intervention

When a client fails to reveal genetic information, Mr. Geller says most of the time the intent of the client was not to lie or be fraudulent. “Say there was a genetic test for a heart condition. The family doctor who receives the results sends a report to the GP (general practitioner) who may not understand and communicate with the patient that there is a problem. In turn, the person may not disclose it to the potential insurer. It’s a chain of broken links.”

Mr. Geller says there is no law that stops the insurer from going into a doctor’s file and picking at it. The insurer can interpret genetic information for its own purposes. “I find that a very problematic issue with no legal precedent,” he adds.

He says that there are, however, public policy reasons why that could be considered discriminatory. “What you might be getting into is charter issues which are rarely argued in this area because the concept of insurance is supposed to be a private contract between individuals so the insurer can refuse to underwrite if they don’t get the information they’re looking for. In effect, the person might have to waive a whole bunch of what might otherwise be rights just to get that contract.”

Is there a point where the contract is offensive to Canadian law? he asks. “I don’t know the answer,” he adds, “but there is no law or legislation that specifically covers it. There’s a precedent out there but I haven’t seen it applied in the area of genetics, nor have I seen anybody talking about it.”

Since there are a numerous types of genetic testing and various ways of using that information, Mr. Lemmens says there is a need to have some form of regulatory body to supervise the forms of information that can be used by insurance companies.

“It has to be based on the scientific validity of the data, the predictive nature of the information and there should be an assessment of value. What type of test is it? How will it impact the people who are affected by it? And there can sometimes be limitations on how that information should be used,” he adds. He reveals that, at the moment, there are no concrete legislative proposals on the table.

Finding common ground

Mr. Lemmens says that while insurers have remained largely silent on this topic, there is currently an interest in the industry to start talking about genetics. “The debate can no longer be avoided. There’s a certain openness to start debating with the public at large or with consumer organizations on what kind of regulatory framework could be introduced in the context of genetic testing, as a result of the spread of genetic testing,” he adds.

Mr. Lemmens and Bartha Knoppers of the University of Montreal set up a working group called Task Force on Genetics and Life Insurance in May in order to openly discuss and debate over the issue.

“The aim is to explore the options in genetics in Canada with industry representatives: actuarial specialists, economists, people who work in the area of insurance, law and ethics,” explains Mr. Lemmens. The group’s academic research is funded by Genome Canada, a funding and information resource in genomics and proteomics.

The CLHIA currently has a special committee called Working Group on Genetic Testing that looks at genetic issues. “We try to stay on top of what is going on in this area,” says Mr. Zinatelli. “It’s an area that’s ever-changing at this point in time with the ongoing research and the new discoveries that are announced.”

In order to deal with this concern, Dr. Empringham has brought in one of Canada’s top genetics and ethics specialist to speak to their senior management team. “We are doing our best to make sure people in management positions are in tune with the issues. I’ve also been involved at an industry level in most of the discussions on genetics and genetic testing. I try to be as current as I can.”

At press time, the Privacy Commissioner of Canada is preparing a document on genetic privacy, requested by the Standing Committee on Government Operations and Estimates of the House of Commons. The document will be provided to the committee, as well as The Insurance Journal, within the next few weeks.