Two Principles in the Debate Over Genetics & Insurance

The UK has been particularly active in exploring the issue of genetics and insurance.  The Human Genetics Advisory Committee (HGC) was established in 1996 and filed the report, "The Implications of Genetic Testing for Insurance," shortly thereafter.  They have put a wealth of information on the web over the past decade too.

Two principles at work in the debate over access to genetic information by insurers are the "principle of mutuality" and the "principle of solidarity."  These principles differ according to whether genotypes are pooled or separated according to individual risks.  The application of these principles has very different political results too.  The principle of solidarity underpins the social insurance model, aka universal coverage; whereas, the principle of mutuality is more in-line with the private, market-based model. 

Principle of Solidarity:

"Social insurance schemes operate according to principles of solidarity and equality. Individuals contribute a sum to the insurance pool which is not explicitly linked to their actual level of risk. In social insurance systems, any claim which is made on the insurance fund is met from the pool, and may be based on an entitlement arising from contributions (e.g. incapacity benefit in the U.K.) or may be related to the individual’s level of need (e.g. income support in the U.K.). Even in the former case there may be a significant degree of redistribution implied, especially in systems with flat-rate benefits and earnings-related contributions. Social insurance programmes based on solidarity principles emerged in many developed nations in the 20th century, following pioneering developments in some countries in the 19th century. In many countries (although not particularly in the U.K.) these schemes are increasingly proving to be unaffordable, and are subject to major structural reforms, often involving the introduction of a greater role for complementary provision through private sector institutions or agencies."

The Principle of Mutuality:

"Those who make provision for their life and health risks using private commercial insurance encounter a very different system, generally based on the principle of mutuality. The workings of private commercial insurance are, of course, very familiar to actuaries. It suffices here to recall that each person should pay an insurance premium which is commensurate with his or her actual or perceived level of risk. The higher the risk brought by the proposer the higher the premium, and there is no assessment either of ability to pay or of the adequacy of benefit entitlement in relation to need (unless the amount being purchased appears unreasonably high for their circumstances)."

C. D. Daykin, D. A. Akers, A. S. Macdonald, T. McGleenan, D. Paul and P. J. Turvey. "GENETICS AND INSURANCE — SOME SOCIAL POLICY ISSUES" Presented to the Institute of Actuaries, February 24, 2003 & to the Faculty of Actuaries March 17, 2003.


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