View more on these topics

Code comfort farmed out to the public

Genetic testing is unquestionably a highly charged and emotive area.

Along with representatives from the Prudential and Norwich Union, I was recently asked to give evidence to the House of Commons science and technology committee, which is investigating the use of genetic test results by the insurance industry.

Politicians and representatives of the medical profession, the media, health associations and, of course, our own industry were present at the hearing. It lasted for two hours and was conducted in a professional manner. None of the MPs was unfair or vindictive in their line of questioning.

Bearing these points in mind, it has become clear to me that immediate action needs to be taken by our industry to allay external concerns and fears. If we do not react positively to these issues, we run the danger of becoming isolated and marginalised within an area of significant human interest whose future development extends way beyond the boundaries of insurance.

The hearing illustrated that despite the well meaning intentions and minimum standards offered by the existing code of conduct, clear differences of approach are being adopted by insurers which is causing confusion, misunderstanding and mistrust elsewhere.

To restore consumer confidence quickly in this issue, CIS would recommend that the industry adopts the following courses of action immediately:

l A revision of existing practices so that insurers commit to using only tests approved by the genetics and insurance committee for insurance purposes instead of the current system which, despite its well-meaning intentions, has caused obvious confusion.

l An open process of dialogue with all interest groups to ensure we move in tandem with those who are directly or indirectly affected by the developments taking place in the field of genetic science.

l An industry working party to design a solution so that no individual within the UK is denied basic life insurance purely on the basis of a positive genetic test result.

There are occasions when principles and reality can become blurred and at times like these we all need to take a step back and take stock of the situation.

CIS&#39s experience has shown that the positive identification of a genetic predisposition affects a very small amount of people in real underwriting terms. This is especially so when compared against the ent-ire pool of risks assessed by insurers.

We have no reason to believe our experience will be markedly different to that of other insurers, which explains why no insurer at present can suggest that genetic test results, for life insurance in particular, are key determinants in setting premium rates.

Some within the industry will revert to type and bring up the insurance doctrines relating to material facts and possible anti-selection issues.

As an insurance organisation with a responsibility towards one of the biggest customer bases in the country, we clearly – despite what some may think – cannot afford to be ignorant of these issues.

What we are proposing, however, does not go against the basic principles of underwriting practice, it simply looks to apply reason to an issue which is still in its infancy.

It is vitally important at this time that the industry is seen as being sensitive to the issues and promoting agendas homed in on social exclusion rather than potential exclusion.

If this does not happen, then once more we will be seen by many as moving too fast and too soon for our own good, with the natural negative reaction this will bring with it following closely behind.

Recommended

Forward looking

So the end of carry-forward is in sight from 2001/02. Is that the end of life as we know it? Perhaps. But the advent of stakeholder pensions means there are still opportunities for those willing to come to grips with the new rules. What are those rules? l It is not generally necessary to have […]

Close encounters of the third-party kind

Since the middle of last year, mortgage lenders have seen margins come under severe pressure. Relatively low demand compared with volumes experienced in 1999 and increasing price pressure borne out of massive oversupply means few lenders can originate anywhere near as much business as they would like. At the extreme end of the spectrum, many […]

&#39Mortgage banks rip off their borrowers&#39

Nationwide Building Society has launched a scathing attack on mortgage banks, accusing them of ripping off longstanding existing borrowers to subsidise cheap deals for new customers. Chief executive Brian Davis says the mortgage market has become “perverse”, with major lenders offering substantially better rates for new borrowers than for existing customers who are stuck on […]

West Bromwich Building Society appoints new director

West Bromwich Building Society is appointing Roger Smith as business development director.Smith comes from internet business Xelector, where he was a founder director. West Bromwich chief executive Andrew Messenger says: “Roger will bring fresh thinking to our business and I&#39m sure we will find his enthusiasm infectious.”

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment