True is that genetic technology, as an emerging part of contemporary medicine practice, is advancing rapidly throughout the world especially during the recent years. Hence, the life insurance companies have developed a strong interest in the genetic test data and sought desperately the approval to use it in the field of underwriting for life insurance policies. Certain debates and various discussions have been brought forth subsequently, resulting in different points of views from distinctive levels of people. On one hand, a majority of insurance underwriters maintains that genetic test data, a kind of advanced scientific and trust-worthy achievement, does bring about considerable profit to the life insurance industry by means of providing detailed individual information especially the present and potential health condition of the applicants and therefore largely reduce the risk of financial loss. On the other hand, some of the policyholders cast doubt on the privacy and security of their personal genetic information in the process of internal controls. This paper will review the both sides in detail and propound several practical and reasonable restrictions in using the sensitive genetic data.
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Reasons for the use of genetic data in underwriting
Essentially, there exists no huge difference between genetic test data and other numerous sensitive personal data which has been collected by the insurers for quite a long period of time. For one thing, in the past more than a century in Australia, family medical history, even including details of mental health, HIV/AIDS, sexually transmitted diseases, as one of the applicants’ absolute private data, played a significant role in assessing the potential risk of diseases and death by providing a rough indicator of genetic factors (Doble, A. et al, 2001, p.50).
Nowadays, as the technology of genetic test is developing at such a high pace, the up-to-date research result may refine the previous crude method and make the data more accurate and reliable (Barlow-Stewart, K. et al, 2001, p.51).
Thus, the insurers could estimate consumers’ health condition in more objective and scientific ways and offer more appropriate policy considering the unique circumstance of each applicant. Moreover, not only family history, but also a slew of other vital individual information like personal financial status, as intimate as genetic data, have been collected and analyzed by insurance companies when customers were applying for a certain policy. Evidently, it turned out that the insurers were capable of dealing with those types of sensitive data in an appropriate way and successfully kept the privacy for their policyholders. ‘The Privacy Commissioner has noted that there is general satisfaction with the handling of information by the life insurance industry.’ (Privacy Commissioner, Information Paper Number 5, September 1996).As a result, there is sufficient reason to believe that they are able to control the genetic test data properly as well.
In addition, genetic test data are beneficial to provide with adequate and complete personal material for insurance companies to calculate a reasonable sum of premium. It is acknowledged that collecting a fair amount of insurance premium is of great importance but with high difficulties. To be more exact, it is quite hard to measure whether the amount is acceptable and equitable for both the insurers and policyholders and whether it is large enough to cover the future payments and expenses, including benefits, dividends and bonus or not. In particular, for some certain types of life insurance policy, only a single lump sum of premium is purchased. The life insurance field, however, is full of uncertainties and risks so that it is reasonable to say that many unpredictable conditions may occur in the future. So if the amount of single premium charged too small and unfortunately the uncertainties happen later, the insurance companies might be unable to keep their promise to pay back the pre-agreed amount of annuities. What is worse, if the number of sold policies is too large, and in other words, the company sold too much this kind of policies, it might suffer from financial crisis or even bankruptcy. Actually, it is insurance that means to face widespread economic uncertain risks and probabilities occurred by chance. (Pokorski, R. J., Swiss R. & Fairfield, C. T., 1997, p.205) Therefore, only if possessing sufficient relevant and exact individual information of the applicants can the insurers charge the relatively fair amount of premium and reduce their financial risks to great extent at the same time. Now under the help of genetic test data, the accuracy and completeness will increase greatly. Because, like there are no two same leaves in the world, the genetic make-up of each person is the unique and it may indicate the probability of some diseases in an asymptomatic carrier (Doble, A. et al, 2001, p.50).
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By this means, the insurance companies will less possibly to suffer from uncertain risk and therefore lower the probability of financial crisis.
Reasons against the use of genetic data in underwriting
On the contrary, a few drawbacks of the genetic underwriting cannot be ignored easily, which refers to privacy after all.
First of all, discrimination, which is the central issue, has to be taken into account. Although, actuaries are concerned that genetic test data facilitate the impersonal and comprehensive assessment of applicants and lower the misprice risk considerably. Whereas, as is argued by some other people, e.g. socialists, the usage of genetic test data is only actuarially fair but socially and morally unfair (Ashcroft, R., 2007, p.1197).Imagine, if the insurers are entitled to collect and public the genetic information randomly one day, those genetically defective applicants may suffer from stress from every corner of the society. It will exert a negative impact on their career life and society life to a certain degree, which detriments persons’ legitimate right. On the other side, unjustified genetic discrimination does exist in some insurance companies. When applying for the same kind of policy, those genetically defective applicants might be despised and be asked to pay the substantial sum of premium which has been deliberated increased. Consequently, they have no choice but to give up, which is what the insurance companies are too pleased to accept—the reducing probability to pay back in the future. For example, according to a survey conducted in the UK, among 2167 applicants with genetic defect, 34% came across problems when they applied for a policy, including refusing insurance, charging high premium, requiring for unnecessary medical examination. In contrast, when the insurance companies were not informed of genetic defect, only 5% encountered problems, among which, 4% were charged high premium and 1% were refused insurance (Low, L., King, S., Wikie, T., 1998, p.1632).
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In fact, even if people had perfect genetic test data, they are equally exposed to health risks in the future. And it is highly likely that genetically a defective applicant lives longer than a well-genetically applicant. As a result, considering form the genetically defective applicants’ points of views, suffering from the much larger sum of premium they have to pay is really unfair and they are not supposed to be discriminated.
Another crucial issue has to be mentioned here is the security of those essential individual genetic test data. Firstly, unlike other general personal information, the genetic information is very special and needs special attention because of its wide coverage of ethics, morality, legitimacy and sociality. Meanwhile, it is not only about the applicants themselves, but also their direct and close relatives (Doble, A. et al, 2001, p.50).
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May be the applicants do approve to provide their genetic information, but what about their relatives, what if they are unwilling to do so? And everyone has the right to protect their own privacy. From this prospective, it is unacceptable to put genetic test data into underwriting use. Secondly, it is hard to figure out whether the insurance companies can keep the privacy for their policyholders and use the genetic test data properly. Admittedly, it is true that most of the insurance companies have done a perfect job in keeping policyholders’ information in security and make good use of it in the past. But still, the violations related to misusing customers’ individual information existed in the insurance industry. For instance, some insurers disclosed customers’ private data to others illegally, which infringed their right to some extent. Thereby, whether such serious as the genetic test information ought to be used in underwriting for life insurance policies is worth to be considered with discretion.
Restrictions should be imposed
As genetic test data can bring about certain benefits to underwriting, outright ban is inadequate. Nevertheless, some restrictions are supposed to be proposed in case of the misusage.
Firstly, before officially allowing the underwriting to use the genetic test data of consumers, related laws and regulations are bound to be established to define the scope between legal and illegal usage of genetic information in detailed.
Secondly, insurance companies with authorities to require for customers genetic data must achieve license. In addition, they must submit the report regarding the usage and management of genetic data annually to make sure the data are used in proper and legal means.
Thirdly, genetic underwriting supervisory board is supposed to delegate professional actuaries and censors to inspect the service condition of genetic data randomly regularly and irregularly. Once an insurance company is investigated to violate the regulation and use the individual genetic data beyond the restriction, it will face rigorous penalty.
Fourthly, in no case can insurance companies divulge a policyholder’s genetic information in any ways without his or her formal permission. Furthermore, each compliant case from the customers must be tackled prudently.
Generally speaking, in the coming decades, it is undoubted that the tendency of genetic underwriting is unavoidable. Since actually it is rather similar to other sensitive individual information, and dose good to help setting a relatively fair price. As a promising and prospective industry with huge markets, it is full of opportunities accompanied by all sorts of risks as well. Under the circumstance, special attention should be addressed , in particular, consumers are concerned about the privacy and security of their own data and some genetically defective ones are discriminated in their socially life. So what we could do is to spare no effort to minimize the drawbacks by proposing justified restrictions and maximum its profits to satisfy both the insurers and consumers.
... ] Ewing T, Birnbauer B, 1994. The Dangers of Knowledge. Genetic Engineering. Vol. 23, p. 13-14 Gareth Harvey, 2001, Babies for ... , 2001, [online]. Available From: - //220.127.116.11/journals/annals/15oct97/small pox.htm [28th February 2001] Australian Institute ... my insurance and superannuation status, and that of my children(Healey, 1994: p. 14) Hopefully the eradication of genetic disorders ...
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... the Council for Responsible Genetics also protects against discrimination in the workplace and discrimination from insurance by pushing congress to pass genetic discrimination laws (web). Being ... should inform them of the Genetics Discrimination Legislation. Because genetics discrimination is fairly new, some legislation in some states against genetic discrimination have been made, but ...
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