CLHIA-ACCAP

Investing in Canada's Health and Prosperity 2014

Issue link: http://clhia.uberflip.com/i/419013

Contents of this Issue

Navigation

Page 9 of 9

Investing in Canada's Health and Prosperity 7 GENETIC TESTING AND INSURANCE UNDERWRITING INTRODUCTION The life and health insurance industry has long‐standing practices for the use of genetic testing information for the purposes of risk assessment to help ensure that all policyholders are treated fairly. In addition, the industry has taken recent action to develop common practices in this area to assist consumers. FUNDAMENTALS OF INSURANCE Insurance is a "good faith" agreement in which parties disclose any information that may be material to the contract so that the contract can be entered into on an "equal information" basis. This ensures that the insured knows what benefits are being promised and that the insurer can properly assess the risk so that the premium reflects the degree of risk assumed. This is fair to the entire pool of insured persons. The principle of "equal information" is set out in the insurance legislation of each province and territory and is the foundation on which all insurance underwriting is based. Individual life insurance contracts are generally for long terms and are underwritten only once, before the policy is issued. Results from genetic tests taken after the policy is issued have no impact on coverage in place under an in‐force insurance policy. The Canadian Institute of Actuaries' research has found that if insurers could not access genetic test results, it would lead to a significant increase in the cost of insurance for Canadians. This could lead to a large number of Canadians, particularly less affluent ones, choosing not to purchase life and health insurance coverage. This would leave these Canadians unprotected from what may befall them in life. INDUSTRY ACTION TO ASSIST CONSUMERS On September 25, 2014, the CLHIA publicly launched an Industry Code on Genetic Testing Information for Insurance Underwriting. The objective is to assist consumers while, at the same time, ensuring that all Canadians can access insurance at reasonable and fair prices. The Industry Code makes a number of commitments, including: to not require an individual to undergo genetic testing as part of the application process for life and health insurance; to support medical research and its benefits, insurers will not ask for genetic test results from applicants where they have had a genetic test performed and they and their physician will not receive or be made aware of the results prior to the insurance being issued; where an applicant informs the insurer that they are considering taking a genetic test, to provide them with a clear, plain language notice of the implications of taking such a test; to endeavour to assist applicants who are not eligible for insurance; to make specific efforts so that employees and agents are informed about genetic tests; and to certify annually that they are complying with these commitments. The Industry Code also continues the industry's strong practice of treating information with the utmost confidentiality.

Articles in this issue

view archives of CLHIA-ACCAP - Investing in Canada's Health and Prosperity 2014