nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Class debate: Should life insurers be allowed to make genetic testing a requirement for underwriting purposes?

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Today our class had a debate on whether or not genetic testing as an underwriting requirement should be allowed in the life insurance industry. I was on the team opposing this proposition and great fun was had by all. In fact, I wish we had more time to come up with even more sophisticated arguments. I know that in hindsight, there is always a better way to do things but my team was unable to provide a coherent answer for why asking about family history should be allowed but genetic testing not allowed and I have posted an answer here. Please note that I do this exercise to share what I feel I have learned from this experience, not to be contentious and NTAA provides the perfect platform for me to do this.

Some may ask what is the difference between genetic testing and asking about family history and I put forth the following answer. Both family history and a person’s genetic make-up give an indication to the probability of disease but a family history does not isolate the cause of the disease whereas in some cases, genetic testing can. However, family history does allow for the influence of external factors that affected those specific family members like lifestyle, environment, exposure to risks etc. So then if you’re looking to narrow the genetic root of the disease with no external factors then genetic testing is the way to go. However, our argument is that it is morally unfair to base premiums on personal characteristics that make up who we are out of one’s control. Both family history and the genes we are born with are out of a person’s control but, whereas family history influences who we are, genetic make-up is who are. Siblings share the same family history but we do not say they are the same person. A trivial example is that even even though I inherited my general hair colour from my parents (family history), the subtle textures and shades are inherently my own and form part of my composition. Furthermore, by our arguments, we shouldn’t discriminate by race which we don’t and even though, in South Africa, we discriminate insurance prices by gender I would argue that it is also morally unfair to do so. If we truly strive for gender equality, we cannot pick and choose what to make equal, all men and women must be afforded the same opportunities whether it is regarding salaries earned or premiums paid.

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One thought on “Class debate: Should life insurers be allowed to make genetic testing a requirement for underwriting purposes?

  1. Hi Jess 🙂 It’s nice for you to elaborate on your team’s argument and share your thoughts with us.
    Ally and I have the following points to make:
    – Your main argument is that it is immoral to risk rate premiums based on factors (namely genetic make-up) that are uncontrollable.
    – Yes, you were right in pointing out our genetic make-up is uncontrollable, but family history is not in your control either. Also, the lifestyle, environment and exposures to risk of family members is not in your control and is unrelated to your risk.
    – Genetic testing eliminates this lifestyle component, and at worst, highlights genetic flags that are likely to be present in your family history.
    – Surely this means that family history of disease is more likely to increase your risk unfairly and due to unrelated factors than genetic testing (even if the predisposition does not end up developing)?
    – To use the sibling example, if parents had a history of heart disease, this family history rating factor would be the same for both. However, if genetic testing was allowed and showed that one sibling was not predisposed to heart disease but the other was, it would enable insurers to rate the “healthier” sibling more fairly rather than have both charged at a higher premium.
    – Note: without genetic testing, both would be charged the higher premium, but with genetic testing, the “healthier” sibling would just be charged a lower premium without necessarily having a negative effect on the other sibling’s premium (which would be higher due to family history anyway).
    – Just a touch on your argument on gender fairness, research has shown that females have higher life expectancy than males, so why should females be given annuity rates that are the same as males? Also, females have been proven to be involved in fewer motor accidents and more careful driving practices than males, so why should females be charged the same premium as males? And females are more prone to diseases such as breast cancer than males, so why should males be charged the same premium as females for their higher risk of breast cancer if gender-neutral premium rating was used? How will charging premium rates the same for each gender be morally fair in the above cases when one gender is so obviously paying for the other’s premium rates?
    – Yes, gender equality states that males and females should be paid the same salaries and receive the same treatment when all other factors are equal, i.e. if they do the same work at the same performance level. However, if females are more or less risky than males, all factors are not equal and charging them the same premium is not gender equality.

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