Workshop Berlin 2010 Ziegler

From IALS Life Sciences University Network

Legal regulation of genetic information in the USA and Germany:
Promises and problems in insurance

(Rechtsassessor Dr. iur. Julian Ziegler, Hamburg)

Human rights, human dignity, privacy rights. These terms, which have already come up in previous discussions today, are all regularly used in the international discussion of ethical and legal consequences of molecular biology and also are frequently used in the issue, which I will try to address.

Ladies and gentlemen, my name is Julian Ziegler and I am going to talk to you about the legal regulation of genetic information in the United States of America and Germany and the resulting problems in private insurance.

The first question to be answered is why insurers are interested in genetic information. The answer is simple: because genetic information improves the predictability of health risks.

The primary interest of insurers lies in achieving a sound calculation of insurance plans divided according to individual risk. For this reason, insurers apply risk-classification of insurance applicants during the underwriting process.

Insurers' secondary interest is the avoidance of adverse selection. The term “adverse selection“ describes a situation in which the insurance applicant has more information about her risk than the insurer. In such situation, the insurance applicant is enabled to obtain insurance at a premium lower than would be equivalent to her insured risk. This in turn endangers the insurance plan itself as the calculated premiums will not cover the actual costs of the insured.

To counter this adverse selection effect, insurers demand their applicants to disclose information about their health status prior to concluding the insurance contract.

Both methods used by insurers are methods dividing the insurance applicants according to the risk they represent. In the context of genetic information one could summarize that genetic information allows a more thorough insurance discrimination process. This is more commonly known as “genetic discrimination“.

The main assumption underlying legal regulations of genetic information both in the USA and Germany is that genetic discrimination is intrinsically unfair. Although this assumption has been debated for years and still is being discussed, it is notable that both countries base their respective legal regulation of genetic information on this assumption.

In the USA, the Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits genetic discrimination. The German Gene Diagnostics Act (GenDG), which came into force on February 1st 2010, also prohibits genetic discrimination.

Although both laws are based on the same assumption and also share the same legal approach, the prohibition of genetic discrimination, GINA and GenDG differ in detail.

GINA is based on a definition of the terms “genetic test“ and “genetic information“. “Genetic test“ is the detection of genotypes, mutations or chromosomal changes by analysis of DNA, RNA, chromosomes, proteins and metabolites. “Genetic information“ is defined as the information derived from an individual‘s genetic test or family history. On this basis, GINA prohibits insurers from requiring an individual to undergo a genetic test and from using genetic information in premium calculation.

The effect of this regulation is a thorough prohibition of the use of any genetic information not related to an already manifested disease in the underwriting process. Consequently, underwriting can only be based on pre-existing medical conditions of the applicant.

The recently enacted GenDG, in contrast prohibits insurers from a) undertaking or demanding a genetic examination, and b) demanding, receiving or using results or data stemming from already undertaken genetic examinations or analyses. However, the second prohibition is not applicable for life-, disability-, occupational disability- and longterm care pension insurance contracts regarding at least 300.000 EUR one-time benefit or 30.000 EUR annual benefit.

Furthermore, the term “gene analysis“ is defined as a cytogenetic analysis, a molecular genetic analysis as well as a gene-product analysis. Phenotype analysis, however, is not included in the definition and thus is not regarded as a gene analysis under the law, even if it reveals genetic information.

The effects of this regulation are more complicated than the clear US-American prohibition of genetic discrimination.

On the one hand, the obligation of insurance applicants to disclose genetic information in case of certain insurance types with benefits exceeding the amount of 300.000 EURO is problematic as there is no economically transparent basis for the chosen amount. Also, because of this purely arbitrary exemption from the prohibition to demand disclosure of and from using genetic information, the possibility of genetic discrimination against insurance applicants might be a question of only 1 EURO or even only 1 Cent, depending on the insured amount.

Furthermore, the regulation ignores that adverse selection might also occur in insurance types which are not part of the exemption, most probably in health insurance where diseases with high incidence but low mortality might – over years – also produce costs exceeding the calculated premium coverage. As the insured of health insurance plans would be faced with adverse selection, the purely arbitrary possibility, e.g. of life insurance, to demand disclosure of genetic information from their applicants and the consequently reduced risk of adverse selection in their insurance plans constitutes an unfair discrimination of the insured in such plans which are prohibited from using genetic information. Consequently this regulation might violate the constitutional right of equality of the insured.

On the other hand, due to the legal definition of the term “gene analysis”, phenotype analyses are still usable by insurers, even if they reveal genetic information about the respective insurance applicant. It is notable, that one of the commonly used forms of phenotype analysis in the insurance underwriting process is the use of a medical questionnaire about the applicants' family history. In this from, phenotype analysis is aimed straightly at the discovery of genetic information about the insurance applicant.

The resulting problems of the legal protection are severe. First, as phenotype analysis is the commonly used form of medical risk-classification, the insurance underwriting process which has been applied in the past can continue factually unchanged. Secondly, genetic discrimination of insurance applicants remains possible due to phenotype analysis.

In addition, insurers' possibility to use genetic information deriving from phenotype analysis while being prohibited from the use of genetic information derived from other sources creates a situation, where an insurance applicant might face worse insurability:

Imagine a person with a family history of cancer. This information would have to be disclosed to insurers who would base the risk-calculation also on this information. If the same person underwent genetic testing for cancer with a favorable result, i.e. with no more than average risk to develop cancer, insurers would be prohibited from receiving or using that information about the applicant in the risk-calculation. Consequently the insurance applicant would either face a higher insurance premium or even be denied insurance based on a misleading result of phenotype analysis despite favorable genotype. In brief, GenDG could force insurers to calculate unfair insurance conditions.

As a comparison of the legal protections offered by GINA and the GenDG shows, GINA does offer a comprehensive protection against genetic discrimination by prohibiting the use of any genetic information which is not associated with an already manifested disease of the insurance applicant.

The German GenDG in contrast neither offer comprehensive nor comprehensible protection. Due to the exemptions from the legal protection against genetic discrimination, the currently used underwriting process still continues. Genetic discrimination is also still an issue. In addition insurance applicants might face unfair insurance conditions despite favorable genotype. Last but not least, the disclosure obligation of genetic information in case of high benefits in life insurance and other insurance types constitutes an unconstitutional and unfair discrimination of the insured which are not part of this exemption.

One has to conclude that based on the given, albeit disputable legal approach, GINA is a much better law than the GenDG.

Thank you very much.


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