http://www.genesage.com/professionals/geneletter/06-01-00/fetures/mortgage.html [taken from: http://www.genesage.com/professionals/geneletter/index.epl] FEATURE ARTICLE Buying a home? Check your DNA at the door By Dorothy C. Wertz, PhD You probably haven't thought of this one - neither has your mortgage lender, if you live in the United States. However, in Britain or Continental Europe, genetic testing could be required for approval of a mortgage loan. European banks usually require the life insurance equivalent to the value of the loan - and obtaining life insurance usually means providing medical information. Although the insurance industry claims that it is possible to get mortgages without having life insurance, this requires effort and determination. The biggest banks require insurance.1 In contrast, American banks base mortgage approvals on the value of the house and the applicant's credit rating; most offer life insurance for the value of the mortgage on a voluntary basis after the loan is in effect. European mortgage lenders could do the same as their American counterparts, but historically, their practice has been different. In Britain, one possible reason for this custom is that most people own the houses in which they live; the rental sector is considerably smaller than that in the U.S. In cases of default, British lenders prefer receiving cash from life insurance policies to the hassle of auctioning houses. So, do genetic test results hinder getting life insurance? In Britain, about 95 percent of life insurance applicants are approved without medical examination or medical records; about one in 100 are ultimately turned down. 2 No one knows how many of these refusals are on "genetic" grounds. British government takes a stand The issue reached a head in December 1997, when the U.K. government-appointed Human Genetics Advisory Commission (HGAC) recommended a two-year moratorium on disclosure of genetic test results on applications for life insurance. 3 (Unlike life insurance, health insurance is not a major issue in Europe because most health care is provided free of charge under government programs.) The HGAC recommended that the moratorium be lifted only if and when tests were proven to have statistically useful predictive value. To accomplish this, the HGAC established a special group, the Genetics and Insurance Committee (GAIC), to oversee test validity and approve insurers' use of tests. The British government never had a chance to act on the recommended moratorium - on the same day as the HGAC report, the Association of British insurers (ABI), which covers almost all (96 percent) British life insurance policies, countered with its own Code of Practice on Genetic Testing, which was subsequently revised in August 1999.4 The 1999 code states that applicants must not be required to take genetic tests; if a premium was previously determined on the basis of a genetic test that GAIC says is not valid for insurance purposes, or the applicant was refused insurance, the application must be re-reviewed without the genetic test; insurers must not offer lower (preferred) premiums to people who voluntarily produce favorable genetic test results suggesting their "superior" health; insurers may ask to see applicants' medical records or results of tests they have already taken, but only with their consent; and applicants are not required to disclose the results of genetic tests taken by their blood relatives. Under this code, British insurers may require applicants to provide a family health history (this has always been standard practice). They may also require applicants to provide results of genetic tests they have already taken, but only if GAIC rules that the test has predictive value useful for insurance. Further, insurers are permitted to use test results voluntarily provided by applicants (for example, a test showing that one does not have a Huntington disease mutation) to counter a high-risk family history. Most insurers argue that at present a family history is the only valid predictor of future health in healthy people, and also the only indication for genetic testing. The ABI argued that genetic information did not differ from conventional medical records. Insurers claim that they need to protect themselves from "adverse selection" (a process begun by applicants concealing information or lying), which the industry estimates (in the absence of any comprehensive research on the issue) to account for almost one in 10 (about eight percent) of applicants. The ABI left one exception to required disclosure of existing genetic test results. Beginning in February 1997, it established a two-year moratorium on applications for life insurance up to �100,000 (about $158,000) directly tied to a mortgage for the purchase of a principal residence. The moratorium was reviewed in March, 1999 and extended until 2001. A voluntary moratorium on genetic testing instituted by the industry for other insurance expired in March 2000, with as yet uncertain results. The insurance industry insists upon obtaining family history, and believes that tests for a number of conditions can provide useful information.2 Huntington disease (HD) Myotonic dystrophy (DM) Familial adenomatous polyposis (FAP) Multiple endocrine neoplasia Adult polycystic kidney disease Familial early-onset Alzheimer disease (not simply having two APOE4 variants) hereditary neuropathies hereditary breast cancer Elsewhere in Europe In two other countries - the Netherlands and Sweden - governments require insurers to provide life insurance (even if not attached to a mortgage) without medical information (not even family history) up to a certain sum: about $128,000 in the Netherlands and $40,000 in Sweden. The Swedish limit is roughly similar to the amounts sometimes provided in U.S. "employer benefits packages," also without medical information. Several other nations - including Finland, France, Germany and Switzerland - have temporary agreements by insurers that they will not require genetic tests. Are genetic tests used for life insurance in Britain? Most genetic advisory groups in Britain agree that genetic tests are useless for life insurance.3, 5, 6 because most single-gene disorders, for which genetic testing is better understood, become apparent during childhood. (Although some parents try to take out life policies on children with genetic disorders, this is rare.) Huntington disease and some other neurological disorders are exceptions, appearing in middle age. Even positive results on genetic tests for single-gene disorders, however, should have no effect on the life insurance industry. If someone with a Huntington mutation takes out a 25-year life policy to obtain a home mortgage, the amount insured will be covered by the first 10 to 15 years of premiums, before he or she is likely to develop symptoms. If the applicant takes out the policy at age 35, years of disability will intervene before death. Most likely the premiums will go unpaid, and the policy will be canceled before he or she dies - a disaster for the applicant, but certainly not for the industry, which has no financial reason to refuse life insurance. The HGAC stated that predictive testing for common multifactorial disorders such as heart disease, cancer, and diabetes is at present useless for insurance purposes because not enough is known about the interactions between genes or between genes and environment. Public policy in Britain is currently based on the industry trade association (ABI), not on government regulations. Government committees are advisory only.7 The insurance industry insists upon obtaining family history, and believes that tests for a number of conditions can provide useful information.2 Nevertheless, at least one academic (not industry) actuarial expert believes that genetic testing for clinical purposes, without disclosure to insurers, would have a negligible effect on adverse selection or the insurance industry8. Therefore, continuation of the moratorium could benefit some individuals, while not harming the industry financially. Relevant GeneLetter links: Can genetic tests prevent me from getting health insurance? (June 1, 2000) Genetic discrimination: The rule of law (April 15, 2000) References and additional relevant resources: 1. HSBC ("5,000 offices in 79 countries"), "Buying a home" Hemel Hempstead, UK (2000). 2. Wilkie, T. Genetics and insurance in Britain: why more than just the Atlantic divides the English-speaking nations. Nature Genetics 20; October 1998: 119-121. Medline abstract 3. Human Genetics Advisory Committee. The implications of genetic testing for insurance. London, December 17, 1997. 4. Association of British Insurers, Genetic Testing: ABI Code of Practice. ABI, London, August 1999. 5. Nuffield Council on Bioethics. Genetic screening: ethical issues. London, December, 1993. 6. House of Commons, Science and Technology Committee. Human genetics: the science and its consequences. London, July 1995. 7. McGleenan T, Wiesling U., Ewald, F. (eds.) Genetics and Insurance. Oxford: BIOS Scientific Publishers, 1999. 8. MacDonald A.S. How will improved forecasts of individual lifetimes affect underwriting? Philosophical Transactions of the Royal Society 352, pp. 1067-1075 (1997). 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