Can consumers and insurers come to a consensus about the appropriate role of genetic testing in insurance underwriting? That was the central question addressed by Anya Prince, associate professor at the University of Iowa College of Law, in her address to the 2018 Global Insurance Symposium, April 24-26 in Des Moines, Iowa.
In her comments, Prince explained that the federal Genetic Information Nondiscrimination Act (GINA) of 2008 prohibits discrimination in the provision of health insurance on the basis of genetic predispositions toward certain medical conditions. The law does not extend to life, disability or long-term care (LTC) insurance, however.
While genetic testing has had almost no impact to date on property/casualty insurance, Prince said after her presentation that genetic testing is being considered for behavioral characteristics that could affect driving and other activities. She added that you could foresee mortgage lenders using genetic testing to seek any factors that might affect the longevity of borrowers.
For insurers writing life, disability or LTC coverage, Prince told the audience that use of genetic testing in underwriting allows for premiums that reflect the level of risk presented by individuals while limiting adverse selection and the “death spiral” that would result. For consumers, however, genetic testing raises privacy concerns and fear of discrimination against those with genetic predispositions toward disease, which could limit their access to insurance.
“There’s empirical evidence that people are not getting medically recommended genetic testing because of fear of insurance discrimination,” she said. “There’s also evidence people are not participating in genomic research because of this fear.”
“When you participate in a genomic research project, you give informed consent,” she continued. “The informed consent documents say, almost across the board, ‘This could affect your lifelong [access to] long-term care and disability insurance.'”
The fear surrounding genetic testing is unfortunate, Prince said.
“If you’re doing a whole genome sequence, the chances that somebody’s going to find something that’s relevant to actuaries and insurance underwriters is actually quite small,” she said. “There are not too many conditions out there that are really highly penetrant, meaning that if you have the genetic markers, you’re likely to get the disease.”
Also, according to Prince, people who undergo genetic testing and follow up with preventive measures generally pose a lower risk of contracting a disease relative to the general population.
Genetic Testing Issues Confronted Internationally
Outside the U.S., other countries are employing two methods, sometimes in combination, to address concerns about the fairness of genetic testing.
In some countries, independent organizations outside the control of insurers are charged with monitoring genetic tests and determining whether their methodologies and results are appropriate for projecting insurance losses. In others, use of genetic testing is banned for coverage at or below a certain policy limit but allowed for coverage beyond that limit.
In the United Kingdom, according to Prince, life insurers have voluntarily accepted a moratorium on the use of genetic testing to underwrite policies for 500,000 pounds or less. Tests for coverage beyond that amount are allowed under the oversight of an independent body.
“I don’t see this policy going away,” Prince said. “Across the board, insurers have not seen major indications of adverse selection.”
Closer to home, Canada’s federal parliament passed a genetic nondiscrimination act in 2017 that extends to several lines of insurance, including life insurance, and to diagnostic tests undertaken to determine the cause of a condition, not only predictive tests. Insurers have voiced concerns about the extent of the law; it is now undergoing constitutional review.
The experiences of other countries will inform U.S. efforts to regulate the use of genetic testing in insurance underwriting, either informally or by law, but there is no escaping the need to strike an ethical balance.
“How do we create a policy regulation that is flexible for consumers and insurers?” Prince asked. “How do we take into account preventive measures?”
“Preventive measures are always going to fall behind measures of risk. We learn about the disease risk first, then we learn about how to prevent it.”