Genetic discrimination and insurance, loss coverage
From a public policy perspective so-called 'adverse' selection may sometimes not be adverse at all. The 'adverse selection' argument for genetic (or gender) discrimination rests on a mis-measure of the benefit of insurance to the population as a whole. A fall in the number of people insured can be consistent with a higher number of losses compensated by insurance, if more of the right people that is, the higher risks buy insurance.
The following papers elaborate on this point, an "argument for kindness".
- Genetics and insurance in the United Kingdom 1995-2010: the rise and fall of scientific discrimination
(New Genetics & Society, 2012)
Actuarial ideology and moral panic concerning genetics and insurance pdf (20 pages)
- Loss coverage: beneficial 'adverse' selection
Why insurance may sometimes work better with less risk classification (short non-technical version) pdf (3 pages)
- Loss coverage as a public policy objective for risk classification schemes
(Journal of Risk and Insurance, 2008)
Why insurance may sometimes work better with less risk classification (longer version, with simulations) pdf (21 pages)
- Demand elasticity, risk classification and loss
coverage: when can community rating work?
(ASTIN Bulletin, 2009)
Why some insurance markets may work reasonably well under community rating pdf (25 pages)
- Some novel perspectives on risk classification
(Geneva Papers on Risk & Insurance, 2007)
An earlier version (in a broader paper, also covering psychological and legal perspectives) pdf (28 pages)
- Genetics and insurance: an actuarial
perspective with a difference
(Reply to Human Genetics Commission consultation, 2001)
An even earlier version from 2001: "...self-selection is at first order a positive phenomenom..." (pp4-5) pdf (15pages)
- Background article on genetics and insurance
(Encylopaedia of Applied Ethics, 2nd ed., Elsevier, 2011) pdf (14 pages)
My first paper on genetics and insurance was published in 1997 (see 1). Over the next several years around the millenium, I consistently argued that insurance companies should not be allowed to ask questions about genetic test results ( to the HGC, see 2). I wrote to the Government Actuary (see 3, 4, 5, 6, 7, 8) and to The Actuary magazine (see 9) advocating that the Actuarial Profession change its policy on numerous occasions in 1999 and 2000.I did all this because there appeared to be potentially serious problems if insurers were allowed to ask routinely about tests, for example
unnecessary deaths arising from reduced uptake of clinically useful tests;
disadvantaging and disparagement of individuals by genetic identity, akin to racial discrimination;
insidious normalisation of discrimination in employment and other social contexts;
infringement of privacy;
'compulsory consent' to testing, eroding autonomy and the 'right not to know.'
There also appeared to be no realistic prospect of any material harm to the financial stability of insurers if their access to tests was banned. The remote possibility that this might one day change could be addressed if and when it arose.
Most actuaries and many others disagreed with me at the time, I believe largely because actuarial ideology suggesting the necessity or desirability of genetic discrimination distorted their view of the evidence. I argued at the time that this ideology was malign (see eg 10, 11) ; after another decade of evidence, it now looks increasingly ridiculous.
The ideology that genetic discrimination was necessary and/or desirable in private insurance led to the UK government establising a Genetics and Insurance Committee (GAIC) along the lines originally suggested by the Association of British Insurers. GAIC was designed to legitimise genetic discrimination, by approving applications from insurers to use genetic tests for insurance purposes. I criticised this concept on many occasions (see eg 12, 13, 14).
The criteria for GAIC approval were very favourable to insurers: essentially a test could be approved if it could be reliably shown to be of some commercial value to insurers. However, because of the lack of credible evidence, GAIC did not progress as the insurers or government envisaged. Over a period of 10 years only one application (for Huntington's disease) received approval. In 2009, the government announced that GAIC would be disbanded.
Archive of this page:
My older notes on genetic discrimination in insurance are retained on a separate page.
Old page on genetic discrimination and insurance Various notes from 2000 to 2009