5 September 1999

CD Daykin
Government Actuary’s Department
22 Kingsway
London WC2B 6LE.

Dear Chris

Genetics and Insurance

I gather that my letter regarding the Position Statement on Genetics and Insurance has caused some surprise and I am therefore writing to try to explain my views.

In order to indicate reasons for my reaction to this particular statement, I need to give my reactions to specific words and phrases. I have done this in an appendix to this letter [not in the Web version, as the statement has since been revised]. However, I would stress that I am not saying that the problem is primarily one of drafting – I am sure a great deal of care was taken over the drafting. My criticisms more of the overall approach, which appears to be based on three themes:

• Discrimination by genetic testing is desirable – the problem is getting the data
• The primary concern for public policy is the "risk of anti-selection" (this or a similar phrase is repeated a least 4 times in the statement)
• The wider public which disagrees with both of the above statements has "irrational and unfounded" views.

On the first point, like most of the irrational wider public, I think that discrimination by means of genetic testing is intrinsically undesirable. This is partly because worries about discrimination in insurance are likely to impede medical research, and partly because if discrimination is permitted in insurance it is likely to spill over into employment an other areas. I see no evidence that access to the result of genetic tests is necessary to ensure the viability of the insurance industry, nor that it will become necessary in the foreseeable future. For the time being it would be better (on either Rawlsian or utilitarian criteria) if underwriting questions about genetic tests were simply banned. I think that the profession should advocate this.

On the second point, I think that public policy should largely ignore the "risk of anti-selection". I base this view mainly on a simple empirical observation. Looking around the world, I see a variety of restrictions or absence of restrictions on underwriting criteria. None of them seems to matter very much: they may cause some difficulty for the insurance industry, but not enough to cause it serious harm. The only exception I have come across, which seems genuinely to make private insurance unsustainable in the way actuarial textbooks describe, is where age rating is not permitted (eg private health insurance in Australia). Public policy should therefore be mainly concerned with other matters, such as the social consequences of genetic discrimination.

To put the point another way: in many circumstances I think that a high degree of anti-selection should be welcomed. I think it is an extremely positive phenomenon. I want sick people to receive treatment, irrespective of whether actuaries think it convenient or technically elegant that it should be financed. I do not regard the actuarial purity of insurance pricing as the greatest good to which mankind can aspire.

On the third point, I think it is NOT the case that people have a negative view of genetic discrimination because of their lack of education, and will agree with you once they have been educated. I have seen reports of experiments by the insurance industry in the US where people are asked for their views, then "educated", and then asked again. The reports suggest that it doesn’t make a great deal of difference – most people remain stubbornly "irrational" even after they have been "educated." [I find this reassuring.]

My adverse reaction to the statement is also conditioned by my wider view that when actuaries comment on healthcare or social policy, their influence is often malign. Actuaries tend to be concerned to promote the interests of institutions (eg against the "risks of anti-selection" to which the Position Statement exhaustively refers), and have a negative influence on the interests of individuals, particularly disadvantaged individuals. They tend (as does the Position Statement) to promote a climate of discrimination against disabled people where none currently exists, and none is necessary to ensure the viability of the insurance industry. This does not increase the sum of human welfare. It is essentially malign.

The best thing which the actuarial profession could do in relation to genetics would be to advocate a ban on underwriting questions about test results, similar to those which apply in many European countries. Medical progress would probably be helped; the likelihood of discrimination in employment and other areas would be lessened; there is no evidence that the insurance industry would be seriously harmed.

Yours sincerely, RG Thomas