Why Genetic Testing Is Important In Life Insurance
Thomas Leonardi
Member Board Of Directors (Independent Director) at The Travelers Companies, Inc. Chair, Nominating & Governance Committee, Member: Executive Committee, Investment & Capital Markets Committee and Compensation Committee.
Many of us are fascinated, and perhaps intimidated, by the prospect of genetic testing. What will we learn about our family history? And, what will we learn about our health and the future health of our children? As the accuracy and affordability of genetic testing technologies has evolved, it may not be surprising to learn that genetic testing can play a very important and valuable role in the life insurance process.
Many American families depend on life insurance to provide economic protection – 90 million, in fact, rely on life insurers’ products for financial and retirement security. Life insurers would not be able to provide this important safeguard to families without access to customer health information. When individuals apply for life insurance today, they typically provide urine and blood samples and complete a health questionnaire. This information helps the insurer better assess and understand the risks involved and therefore provide an appropriate and fair price to the customer.
With the advent of genetic testing, which generates more predictive information while being less invasive and less expensive, an important question now faces the insurance industry: should insurers be able to use genetic information in their underwriting process?
In the very near future, U.S. life insurers, consumers and regulators will need to engage fully and openly with respect to the role genetic testing information can and should play in the life insurance underwriting process.
We welcome this dialog.
At AIG, we believe applicants should be required to disclose information revealed through genetic testing that has a significant impact on their mortality.
We view genetic testing in a very similar manner as blood and urine testing – as an important source of risk information. Just as when blood and urine were first introduced to the life insurance underwriting process, our approach to the evolving expansion of genetic information remains the same: to develop sound actuarial principles around the utilization of data in risk selection within and necessarily between, all the guardrails of fair and transparent underwriting principles.
Furthermore, transparency between applicants and life insurers is paramount to insuring life insurance remains fairly priced. If insurers are prohibited from accessing genetic testing information in the hands of an applicant, some may take advantage of the process by procuring life insurance at a rate lower than their actual risk. This creates an asymmetric marketplace whereby others have to pay more to make up the difference. Such imbalance could put the entire system in jeopardy.
Genetic testing also has an important societal role as it can lead individuals to take preventive measures enabling them to live longer, healthier lives. Individuals who have taken proven measures to reduce their risks and as a result of which may live a longer life, should be afforded appropriately modified life insurance rates. We think consumers would welcome this opportunity.
We also believe that the breadth and scope of genetic information will develop rapidly and any regulatory framework must be developed in a dynamic fashion to meet the pace of technology and innovation.
We at AIG remain ready to engage with our regulators to discuss this challenge.
Another important factor is that genetic testing information, like all other medical information provided in the life insurance underwriting process, remains confidential, in strict compliance with a robust federal and state law framework including HIPPA, the Gramm-Leach-Bliley act, the Fair Credit Reporting Act, as well as state-level privacy statutes and adopted versions of the NAIC Privacy of Consumer Financial and Healthy Information Model regulation. Irrespective of these legal obligations, protecting our customers’ medical and other sensitive information is the right thing to do and we will remain at the fore in insuring confidentiality.
We care deeply about our promise to protect our customers and their families’ financial future. Fair and transparent use of genetic testing information will help us continue to honor this commitment.
Never Settle
5 年This is a game of probabilities. From the insurance side, the client and the regulatory agencies too. Information misuse is pervasive over history. Genetic information is not different. At a cost of the next generations the key question is to understand how much is to much? Having this conversation at an abstract level is useless. Health conditions detectable and associated with reducing life expectancy represent a new chapter on our ability to decide as humans upon our own lives and how we want to live it (freedom). We are scratching the surface in a dangerous way. There is a huge Corporate Social Responsibility on all insurance companies towards explaining to society what they really want to ensure and what these initiatives entail. I do agree the dialogue needs to start but eventually from another perspective: are insurance companies determining how we may live our life?
Sr. Regulatory Data Analyst
5 年But are you ready to talk about profits and the insurance model used for maximizing at the expense of the clients and customers.
Cancer Support Programme Manager
5 年Another point - people will actively avoid genetic testing if they feel it will impact on their insurance. Therefore they may never be diagnosed and successfully treated or managed for their condition should they have one. We can’t afford to be reckless - people’s lives and health are on the line and genetics is an enormously complex field of work, which geneticists often struggle to understand let alone an insurance company...
Cancer Support Programme Manager
5 年The issue here is the word ‘risk’. Many genetic conditions are rare enough that we don’t have enough data to fully understand that person’s risks of adverse clinical outcomes. It’s equally important to understand that a faulty gene does not always mean you will go on to develop a certain condition. This is called ‘incomplete penetrance’ - where the fault or mutation is present but causes either fewer or no symptoms/measurable health issues. In these cases you are unfairly punishing people for a faulty gene that may never affect their health in anyway. The ethics of genetic testing are ever evolving, but this article concerns me enormously from a clinical perspective.
Retired
5 年So let's just unfairly price thise who may have most need of life insurance out of the market altogether? This article reeks of eugenics and is utterly outrageous.