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Genetics and Life Insurance: A view into the microscope of regulations

Source: Asia Insurance Review | Oct 2017

Life & Health Technology

The use of genetic information for life, disability, critical illness and long-term care insurance is likely to increase in relevance. The Geneva Association research report “Genetics and Life Insurance: A View into the Microscope of Regulation” represents an attempt to understand key aspects of genetics, as well as limitations and controversies of its utilisation in life insurance. Mr Ronald Klein of The Geneva Association presents an abstract of the report.
The discovery of the gene mutation for Huntington’s Disease in 1993 may have been the single most important cause for the misunderstanding of genetic and genomic testing. Huntington’s Disease is quite rare and only affects about 1-in-10,000 people. Unlike most diseases, Huntington’s Disease is monogenic and 100% predictive. If you have the mutated gene, you contract the disease and, if you contract the disease, you have the mutated gene. 
   The certainty of prediction for this specific disease leads many people to believe that genetic and genomic test results are much more powerful than they really are. The vast majority of diseases cannot be predicted with any degree of certainty near the 100% certainty of predicting Huntington’s Disease. 
The Human Genome Project
With over 3 billion pairs of bases, the DNA double helix structure is one of the most complicated scientific structures known. 
   The Department of Energy, the National Institutes of Health and other international organisations convened in 1984 and agreed to study DNA to better understand it. This led to the very ambitious goal in 1990 to map the entire human genome sequence, named the Human Genome Project. 
   The project was initially intended to last 15 years with a budget of US$200 million per year, or a total budget of $3 billion. Once analysed, the data gleaned from this project was hoped to be a source book for insight into the possible treatment of approximately 7,000 rare genetic diseases that currently affect mankind.
   Not only was the project finalised a full two years before its planned completion date, it also came in under budget by about $300 million. An important element of the project, besides the purely scientific aspects, was to consider the legal and ethical ramifications involved. 5% of the budget, $150 million, was allocated toward this purpose. While the first mapping of the human genome took 13 years at a cost of about $2.7 billion, prices have come down quite quickly. 
Testing and Insurance
While few would disagree that an employer should not have the right to restrict work based on the results of a genetic test, a personal decision to purchase individual life and health insurance presents a different dynamic. 
   Voluntary insurance is based upon the principle of pooling of like risks. When a potential policyholder has information about his or her health that is not shared with the insurance company, this could lead to anti-selection where poorer risks purchase more insurance and better risks purchase little or no insurance. An insurer would find it extremely difficult to cover claim payments with existing revenues for pools where there were many anti-selective risks. 
   However, if insurers had the right to ask for information from previous genotyping tests, this could cause an entirely different dynamic. Some doctors argue that this may cause a person to postpone or even cancel a planned genetic test that might be vital to that person’s wellbeing. The fear of being denied insurance could become an obstacle in the continued health of an individual. 
   This could put the insurance industry in a very precarious situation. Mitigation of this problem is possible if the person purchases insurance prior to scheduling a genetic test, as suggested by many genetic councillors. Nevertheless, future additional insurance purchases may still be affected.
   The question of anti-selection vs the fear of being denied insurance mostly applies to life insurance rather than health insurance because most leading countries in the world offer government-provided health insurance or mandate the purchase of health insurance. If health insurance is provided to everyone, by definition, there can be no anti-selective risks. 
   While the academic and medical communities continue to argue the merits of genetic exceptionalism, regulators are adapting to the influences of the media and the general public that genetic testing requires its own set of laws. One interesting discussion borders both genetic exceptionalism and current genetic regulations. 
Genetic regulation
The medical profession is highly aligned with clinical trials for new drugs and procedures. For example, the magnet resonance imaging (MRI) machine was first built in 1977 and approved for clinical use by the Food and Drug Administration (FDA) in the US in 1984. 
   However, 23andMe began its direct-to-consumer campaign in 2007 for $99 without any FDA approvals. Its stated functions were to help build a participant’s family tree using genetic material from a saliva sample and to disclose some interesting and “fun” traits such as the odds of having a certain eye colour or whether the participant had wet or dry ear wax. 
   What quickly provoked the attention of the FDA were the additional risk factors included in the report such as the tendency to be obese, be an alcoholic or develop breast cancer, Alzheimer’s disease or Parkinson’s disease. Along with this information, 23andMe was offering medical advice on how to reduce the risk of developing these diseases.
   In 2013, the FDA banned 23andMe from offering medical analysis in its report. This caused the company to only offer ancestry information instead of the information on the 254 possible conditions that it originally offered. 
   23andMe reworked its testing in conjunction with the FDA and received approval for 36 of the original conditions, although it can only tell if a person carriers the gene mutation for these 36 diseases without stating the probability of actually acquiring the disease. But, on 6 April 2017, 23andMe received FDA approval to report on the probability of developing 10 specific diseases. The fact that genetic testing holds the allure of the general public as an exact science even before evidence-based results are available, is troubling to many physicians. 
   Some of the best minds in the medical field continue to argue as to the predictive powers the genetics currently holds. These diverse views by well-respected experts can cause confusion in both the medical and the public arenas, making regulation of genetics that much more difficult. Few in the medical profession doubt the potential of genetic tests, however many believe that clinical proof of the value of genetic tests (clinical validity) is necessary before they become more widely used and trusted.
The use of genetic information for life, disability, critical illness and long-term care insurance is likely to increase in relevance as testing becomes more widespread and better clinical data emerges. Existing regulations generally apply to employment and health insurance. For life, disability, critical illness and long-term care insurance, regulations typically fall into the following categories:
  1. No regulation
  2. No regulation with written or unwritten codes of conduct from insurance industry groups
  3. Prohibitions on insurers requiring applicants to take a genetic test and prohibitions on discrimination if the applicant refuses to take a test
  4. Prohibitions or moratoriums on using results from existing tests when policies are below certain limits
  5. Prohibitions or moratoriums on using results from existing tests at all, sometimes including use of family history information
A country having no genetic-specific regulation for life, disability, critical illness or long-term care insurance (bullet point 1) implies that the country considers genetic information to be included with other medical information. However, it could simply mean that the country has not yet found the time, need or support necessary to enact a specific regulation. In these countries, the fact that industry groups may have attempted to fill a regulatory void by issuing codes of conduct for their member companies (bullet point 2), implies that the industry would prefer its own codes rather than sometimes unpredictable broader regulation.
   Prohibitions (bullet point 3) could mean that governments do not trust the insurance industry to follow non-discriminatory practices with respect to genetic testing. Those countries that have regulations prohibiting the use of results from existing genetic tests below certain limits (bullet point 4) seem to subscribe to the theory that some level of life, disability or long-term care insurance is an inalienable human right, vis-à-vis medical insurance, but above that limit is optional. 
   An absolute prohibition or moratorium (bullet point 5) could simply mean that regulators in those countries are taking a wait-and-see attitude. As new testing becomes more affordable and more widespread, life and health insurance companies need to monitor the emerging trends in genetic science closely. Working with regulators, medical professionals, industry groups and genetic councillors to agree on reasonable self-regulation in the field of genetics may be a prudent approach to staving off unwanted restrictive regulation. A 
Mr Ronald Klein is Director Global Ageing research programme at The Geneva Association.

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