Frank Swedlove is chief executive officer of the Canadian Life and Health Insurance Association.
For many Canadians, spring brings a long-awaited winter thaw, plenty of rain and a host of health-awareness campaigns aimed at fighting terrible diseases, including cancer, Parkinson's, hemophilia, celiac, cystic fibrosis and others. Many of these campaigns urge early detection, and advances in genetic testing have significantly improved the ability to identify and begin treating many medical conditions, saving and prolonging the lives of those afflicted.
We should celebrate and embrace this scientific wonder, but misinformation about genetic testing and insurance is creating unnecessary controversy and confusion, and new legislation concerning genetic testing that is being considered in the Senate isn't helping.
Insurance agreements are contracts that offer financial security for unanticipated loss. They are "good faith" agreements 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 applicant for insurance 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.
For example, if you know that there is a history of cancer or stroke in your family, the principle of equal information obliges you to disclose this at the time that you apply for an insurance policy. Similarly, if you have had a genetic test that reveals you are at risk of contracting a major illness, and you know this, you are obligated to disclose this as well. This is fair to the entire pool of insured persons, and the principle of equal information is set out in the insurance legislation of each province and territory. It's the foundation on which all insurance underwriting is based. Canadians are sensitive to the price of insurance, so keeping rates low and stable is important, and our current system does just that. In fact, it allowed 700,000 new life insurance policies in 2014.
Changes under consideration by politicians, including through Bill S-201, would lead to a significant increase in the cost of life and health insurance if insurers are prohibited from accessing genetic test results. In its recent studies, the Canadian Institute of Actuaries concluded that if insurers are not able to access the results of genetic tests, "the impact on insurance companies will be substantial." For example, the cost of term life insurance in Canada could rise by 30 per cent for males and 50 per cent for females. A significant increase in the cost is likely to result in a large number of Canadians, particularly less affluent ones, choosing not to purchase life and health insurance coverage. This would leave these people unprotected from what may befall them in life, be it premature death, serious health problems or disability.
The industry is sensitive to the needs of Canadians applying for insurance who may be affected by adverse genetic test results. That is why the industry has put in place an industry code that requires life and health insurers to adhere to a variety of commitments. For example, the code ensures that no Canadian will be asked to take a genetic test as a condition of obtaining insurance. Once a person has made full disclosure and purchased a policy, their coverage cannot be negatively affected in any way by information from genetic tests taken after the policy is in place. And insurers will not require the genetic test results of any person other than the proposed insured (e.g., a family member), nor seek to obtain those genetic test results independently.
The issue of genetic testing is a deeply personal and sensitive issue. The insurance industry has taken action to provide greater clarity regarding genetic testing information and what consumers can expect when they apply for insurance to ensure they can make informed decisions, while continuing to help them protect their families from unexpected events. We urge careful consideration of any changes that would ultimately increase the price of insurance for the majority of Canadians and negatively affect their ability to purchase protection from what may befall them in life.