The stuff in the notes on the Moratorium on Genetics and Insurance only talks about long term products (IP, CI and LTCI). Does it apply to PMI? If not, does anyone know if there any rules / agreements regarding using generic tests for underwriting PMI? I guess that you could argue that it is not so important for annually renewable contract as the insurer could just cancel cover. But wouldn't that be a a bit unethetical / attract bad publicity?
I seem to remember from my days working in PMI that we were not allowed to use the results of genetic tests in underwriting or pricing – this is very likely to still be the case. I think we did some work to confirm that this was no big deal (financially), because such cases would be relatively rare and pre-existing conditions and chronic conditions are usually excluded, and so the impact on PMI claims would be small. Also, all PMI insurers in the market would be affected in the same way – i.e. if none of them can use genetic info, then all equally likely to be affected by anti-selection. Agree that it would not be on to cancel someone’s cover on the basis of an individual’s claims experience (unless it was fraudulent!). Of course, a short-term insurer can always increase premiums generally each year if, say, overall experience is worse than expected – so they are not so vulnerable as long-term insurers, yes. Hope this helps
Thanks Steve. I did an exam qu at the weekend - Sept 2005 - and it ties in exactly with your reply. Bit wierd that the notes don't mention PMI but mention all the other products??
Oh good - I'd actually forgotten about that question! I guess the core reading can't cover everything and having an exam question on PMI tests application of the bookwork. However, I'll make a note to update our materials to mention PMI here.
PMI and genetic testing Hi, Thought I would mention that in CH21 there is a section that briefly discusses the impact genetic testing is expected to have on all products, including PMI. It is a more of a summary of where you would expect the biggest impact - CI, followed by LTCI and then IP with minimal impact for PMI. Hope this bit helps. Geetha
