Insurers discriminating on genetics

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A young man has been denied full insurance cover because he told an insurance company he had discussed genetic testing with a genetic counsellor, prompting academics to say a collaborative approach between industry, government and researchers is needed to address discrimination.

A case study presented by health and legal experts from the University of Melbourne and University of Tasmania has shown some life insurance companies discriminate due to genetic test results for cancer pre-disposition.

Lead author Dr Louise Keogh, from the School of Population and Global Health at the University of Melbourne, said the case presents evidence that life insurance companies have made incorrect risk-assessment judgments based on genetic information.

“In addition, we have previously found that the fear of such discrimination can act as a deterrent to genetic testing.”

The case study – published in the Medical Journal of Australia (MJA) last month – revealed that James (pseudonym) in his early twenties was denied full life insurance cover because he told the insurance company he had discussed genetic testing with a genetic counsellor.

He was later tested and found to carry a mutation in the MSH6 gene. After disclosing this, he was denied cover for cancer by two other life insurance companies.

Unsatisfied with the insurance companies’ risk assessments, and based on his understanding that regular colonoscopy screening significantly reduced his risk of cancer, James made a complaint to the Australian Human Rights Commission.

“After informing the third insurance company that he had done so, he was offered full coverage, which suggests that the company did not have actuarial data to justify its decision,” Keogh said.

The authors want a collaborative approach between industry, government and researchers to address these issues.

“This case provides evidence of the high level of initiative and proactivity required for a consumer to achieve a fair result,” said University of Tasmania’s Professor Margaret Otlowski.

“It demonstrates the need for further conversation and action on the use of genetic test results by life insurance companies.”

Wealth Professional asked leading life insurance companies what their stance is on discriminating on genetic test results.

A Zurich spokesperson said the company was not in a position to comment as the full details of this specific case are confidential and not known to Zurich.

TAL is a member of the Financial Services Council and must comply with its standard on genetic testing, a spokesperson said.

FSC Standard No. 11 says no insurer can initiate genetic testing, although insurers may request that all existing genetic test results be made available to the insurer for the purposes of classifying the risk and appropriate cover price.

“In some circumstances the deliberate withholding of significant information amounts to material non-disclosure or fraud, with adverse consequences for the individual under existing legislation,” it states.

FSC is not likely to change genetic testing guidelines in the near future.

"Our genetic testing standard is current and we are happy with its content," a spokesperson said.