SwissRe Life Risk Selection 2011

Fair risk assessment
in life & health insurance
Private insurance relies upon the use of objective,
relevant and reliable data for insurance pricing
purposes. This enables insurers to consider
differences between risks in a way that is fair
to consumers and insurers.
Impairments to the commercial freedom of insurers

to price and underwrite will most likely result in
higher insurance prices – and therefore lower
availability, affordability and choice for consumers.
It is important that governments and regulators
consider this as they seek to increase industry
regulation and legislation, especially in relation
to the issues of discrimination, privacy and
entitlement.
Table of contents
Executive summary 2
1. The private insurance pricing and risk selection process 4

1.1 Private insurance and the concept of pooling 4
1.2 Individual life underwriting 5
1.3 Medical information considered in the underwriting process 8
1.4 Level of underwriting evidence 10
2. Risk selection and the regulatory environment 12

2.1 Discrimination 13
2.2 Privacy law 19
2.3 Entitlement 20
3. Evidence-based ratings and their application 23

3.1 Evidence-based medicine: a model for the evidence-based
rating approach 24
3.2 The process of developing evidence-based rating guidelines 26
3.3 Rating for obesity: an example of evidence-based rating in action 32
Swiss Re Fair risk assessment in life & health insurance 1

Executive summary
Governments and regulators are exerting increasing influence on the risk selection process
of the private life and health insurance industry. This was placed significantly under the
spotlight by the 1 March 2011 European Court of Justice ruling on the use of gender
in insurance. This announced that the current exemption for the use of gender as a risk
factor in insurance contracts will be removed with effect from 21 December 2012.
While the ruling surprised some, it follows three decades of regulatory developments
and pressure on the industry to prove that its risk selection process is fair, and that the
price charged to the consumer of insurance products is actuarially sound.
Private insurance contracts are based fundamentally on the commercial freedom to

price and underwrite according to the risk presented. This offers the fairest way to
provide coverage for the maximum number of people at an affordable cost. Impairments
that impact the commercial freedom to price and underwrite and could result in higher
prices for large sections of the insurance-buying public. This may lead, ultimately, to
lower availability, affordability and choice of private insurance for society as a whole.
The key underlying principles of the life insurance industry are explained in Chapter 1.
Underwriters are increasingly facing constraints on access

to information known to consumers about their risk profile.
The March 2011 gender ruling occurred within a wider context of debate regarding the
themes of discrimination, privacy and entitlement in private insurance. Sensitive issues
such as HIV and genetics have been key catalysts in turning these themes into key
regulatory issues for insurers. There has been a global trend toward regulatory develop
ments that govern how genetics, disability, age, sexuality, race and foreign travel
are handled by the insurance industry. As a result underwriters are increasingly facing
constraints on access to information known to consumers about their risk profile.
Anti-discrimination legislation can present a concern

for insurers, because it denies underwriters the ability
to differentiate between people on the basis of a fair risk
assessment.
Chapter 2 argues that despite its negative connotations, discrimination in the true sense
of the word can equally be fair as it can be unfair. Unless industry exemptions are in
place, anti-discrimination legislation can present a concern for insurers, because it denies
underwriters the ability to differentiate between people on the basis of a fair risk
assessment. In such circumstances, the law effectively forces insurers to cross-subsidise
between groups of policyholders – and once again, this can lead to price increases
and, ultimately, to a reduction in the availability of insurance cover.
2 Swiss Re Fair risk assessment in life & health insurance

In the ongoing debate on the ability to underwrite, Swiss Re, whilst opposing unfair
discrimination, supports the use of objective, relevant and reliable data for insurance
rating purposes. The actuarial and data-driven basis behind differentiated prices offered
to consumers ensures fairness and competitive prices. Chapter 3 includes detailed
discussion of evidence-based rating guidelines, the process by which they are created
and continually updated, and the way they are coupled with an underwriter’s skills and
knowledge to establish risk-relevant ratings. The existence of these techniques should
provide assurance to regulators that the industry undertakes the risk selection process
responsibly.
This publication is an update of Swiss Re’s 2007 publication Life risk selection at a fair
price: reinforcing the actuarial basis. We believe the factors present then continue to
influence the current and future landscape.
Without doubt, demonstrating that long-established risk selection practices are fair is a
priority for the industry. Part of that is having the data to prove it, but it also requires a
different way of engaging with stakeholder groups, especially when dealing with such
emotive topics as unfair discrimination. Sometimes our reliance on logic and technical
expertise fails to adequately explain the real benefits of insurance and undersells how
much is being done to insure more and more lives.
Demonstrating that long-established risk selection

practices are fair is a priority for the industry.
The challenges the industry is facing should also act as a further stimulus to continually
innovate to find new ways of assessing and classifying risk.
We hope this publication provides useful input to the important discussions ahead on
gender, age and disability. Swiss Re looks forward to working with all stakeholders to
create solutions for society that meet the needs of consumers whilst ensuring the future
viability and success of the insurance industry.

1. The private insurance pricing and risk selection process
Insurance is a means of pooling risk so that the financial impact of any insured event,
which could be significant or disastrous for the person or company holding the insurance
cover, is spread across a wider insured population.
In many markets, particularly in Continental Europe, a distinction must be made between

private insurance and social insurance benefits that governments choose to provide for
their citizens. The level of social insurance-type protection considered appropriate by
government varies widely from country to country, and so therefore does the level of
private insurance needed to complement it. The point at which social – or compulsory –
cover needs to be supplemented with additional provision is the starting point for the
development of the private insurance market.
Compulsory social insurance schemes are commonly based on a system of community

rating, where the same premium rate is applied to all members of the community
covered, with premiums often funded from taxation. Alternatively, premiums may vary
– and this variation may be subject to very different criteria from those used in private
insurance. For example, the wealthy may pay higher premiums than the poor for
the same or lower levels of cover. Benefits are pre-determined and may be restricted
to health insurance or care for the disabled. Depending on the country concerned,
social insurance schemes may be administered entirely by the government or in partner
ship with private companies.
1.1 Private insurance and the concept of pooling
Life and health insurance products come in a range of designs to cover different
protection needs. One key distinction is between individual insurance cover and
collective (or group) insurance. Group insurance is issued by the insurer to a particular
group and covers all members of that group; the most common example is a group
contract issued to an employer to provide cover for its employees.
Individual cover is purchased at free will by individuals directly from an insurer or via
an intermediary. For private insurance arrangements there is generally no compulsion
on the insurer’s part to provide individual life and health insurance, and so insurers
consider the risks presented to them on an individual basis. Life and health insurers use
two key concepts to determine the premium paid for any individual risk: pooling and
underwriting.
Pooling is the practice of grouping similar risks and charging the same – or standard –
premium rate for each person in the pool. Each person in the pool is assumed to exhibit
a broadly similar risk profile. A simple example would be a pool of private life insurance
customers of a certain age or age band. A second pool would be created for people
of another age or age band – and so on. Once a contract has been entered into, equal
risks are placed into the respective pool and managed collectively.
The pooling concept and the assumption of risks with similar profiles are fundamental
to insurance companies’ pricing process. Based on the risk characteristics of each
specific pool, the insurer’s pricing actuary will assess the premium rates appropriate to
cover the collective risk, using a degree of averaging within each pool. Ensuring that
the risks in the pool remain close to this average is crucial in making sure that pricing is
fairly applied both within and between different risk pools. The insurer will also want
to accommodate as many people as possible in each pool: the larger the pool, the less
variation in the collective risk.

As well as paying claims triggered by events occurring within the pool of insured risks –
deaths, for example – the insurer’s costs will include other factors such as marketing,
administration, reinsurance cover and taxation. Taking account of all its costs, the
insurer’s profit margin may be no more than a small percentage of the claims’ cost. If
claims in any year were to be significantly higher than expected, the insurer’s operating
profit could be wiped out. Given these low margins, it is clear that unexpectedly
high claims would have a significant effect initially on profits and then, inevitably, on
premium rates.
It is crucial therefore that the risks within each insurance pool are similar. Maintaining
the balance within the pool helps to keep claims costs within expected limits and
to keep premiums competitive, for the benefit of consumers of insurance as a whole.
Private insurance operates at its most efficient when

differences between the risks in the pool can be taken
into account in a way that is fair to both consumers
and insurers.
To achieve this balance, life insurers use individual life underwriting, which makes
allowance for some risks to be marginally better and some marginally worse than the
average, standard risk.
1.2 Individual life underwriting
Individual life underwriting describes the process of judging whether an individual risk
falls within a particular pool and how any extra risk might be handled. In group schemes,
by contrast, members of the scheme are accepted assuming they fulfil minimal group
underwriting criteria, which leads to granting a free cover (ie free of individual life
underwriting); only those qualifying for benefits above the amount of the free cover limit
are individually assessed. Table 1.1 illustrates how underwriting is applied across the
various forms of insurance discussed in this chapter so far.
Table 1.1 Social Private Private

The level of underwriting in relation to social Rating model Community Group Individual
and private insurance Who chooses cover Government Employer Individual
Consumer choice Compulsory Offered to all eligible members Free
Underwriting None Simplified* Complete**
* Risk factors of the group as a whole are underwritten

** Risk factors of the individual are underwritten
Individual private insurance is commercial and risks – this is the process of underwriting. Less
voluntary, and designed to complement social underwriting is required for group insurance
and group insurance coverage. The voluntary schemes where the cover is limited and offered
basis of individual private insurance requires to all members. Social insurance is compulsory
insurers to assess the risk presented by the to the whole population and involves no
applicant before entering the pool of insured underwriting.

Insurers’ main argument in favour of underwriting is to control the overall level of risk in
the portfolio, by avoiding large cross-subsidisation between the premiums paid by one
group of policyholders and another. Because life insurance applicants are not forced to
buy cover, any degree of cross-subsidisation is unlikely to be to their advantage. For
example, if individual life assurance were available to people who have had a heart attack
and to healthy applicants at the same price, it would be cheap for the unhealthy –
encouraging them to take out life insurance – and expensive for the healthy, leaving
them less able to afford the necessary cover for themselves and their families. As a
further example, in an environment with no underwriting it may be commercially
advantageous for an individual to purchase life insurance cover against the death of a
related, unhealthy third party (ie where there is a valid insured interest), and be able to
benefit from an arbitrage between the cost of the cover and the amount assured under
the policy.
With this in mind, central to the relationship between the applicant and the insurer are
two key principles. First, that there should be symmetry of information between what
the applicant knows about the risk he or she presents, and what the insurer receives
when considering the risk and setting a fair price. Second, the relationship should be
founded on utmost good faith; in entering into a contract with a life insurance company,
consumers have a legal duty to share information relevant to the risk they present. If the
applicant withholds relevant information from the insurer, the overall balance of rights
and obligations between the parties becomes biased in favour of the consumer. Similarly,
the balance can be skewed if the law prevents private insurers from asking for, or using,
risk-relevant information in the underwriting process. If this information is available to
the applicant but not the insurer, then the assumptions made by the actuary in setting
the premiums most likely will not be met.
Figure 1.1
The basis of private insurance Benefits to insurer Expert risk assessment Benefits to policyholder
Information symmetry Pooling similar risks
Keep within Equity between

mortality assumptions policyholders
Accurate and
sustainable pricing
Competitive premium
Spread the risk
rates
Maintain profitability Access to insurance
Efficient insurance
market
Expert individual risk assessment by under they choose. The benefit for the policyholder is
writers is vital to private insurance as it keeps to obtain insurance at a fair and competitive
the insurance system in balance. Underwriting price. For the insurer, the benefit is to maintain
enables insurers to group together those with the experience of its portfolio in line with
the same level of expected risk and to charge mortality or morbidity assumptions.
them the same premium for the protection

Deliberate or innocent non-disclosure on the part of the applicant will cause unexpected
claims, as will laws to prevent insurers from asking for the information they need to
understand the complete risk profile. The cost of this anti-selection must be cross-
subsidised by the insurance pool, and therefore by other policyholders. Insurers’
increased exposure to claims experience due to anti-selection can cause prices to go
up, or even products to be withdrawn. Both outcomes lead to lower availability,
affordability and choice of private insurance for society as a whole. By reducing the
anti-selection risk and keeping the system in balance, underwriting is of considerable
benefit to policyholders and allows insurers to provide cover for their customers’
unexpected losses at a fair and reasonable price.
The following example of anti-selection demonstrates how allowing applicants to not

disclose relevant medical information about their health status at the start of the
underwriting process may result in adverse experience, leading to higher premiums for
all. The example is from the United Kingdom where, with this particular product, it was
not necessary for applicants purchasing endowment-type mortgage policies to provide
health-related information. The assumption was that purchasing a house or moving
from pure protection cover to a more expensive investment-style contract would be an
adequate safeguard against anti-selection. However, some years after these policies
went on sale it was found that the number of claims greatly exceeded those assumed
by the actuary in setting the premium rates – as illustrated in Table 1.2.
Table 1.2 Actual claims over expected

Illustration of higher-than-expected claims In-force policy duration
occurring in a non-medically-underwritten Age 0 years 1 year ≥2 years
product ≤30 120% 105% 95%
31– 40 200% 194% 101%
41– 50 162% 164% 141%
51– 60 251% 177% 162%
All ages 169% 157% 132%
Source: Continuous Mortality Investigation Reports, No. 11 (1991): tables 1.1.1 and 1.6.1
The ratio of claims experienced of an endow terms). Purchasing a house, without asking for
ment-type mortgage product compared with any health-related information, was subse
those expected, as determined by the pricing quently found to be an inadequate surrogate
actuary (ie above 100% equals unexpected for traditional health-related underwriting
higher claims experience) (observation period criteria.
1983–86; males; guaranteed acceptance
In the vast majority of cases, the underwriting process results in risks being allocated to
the appropriate, pre-determined pool of standard risks, ie the applicant pays only the
standard cost of cover as determined by the pricing actuary for that pool. Those applicants
who present a higher risk to the pool are classed as impaired or substandard risks. For
such risks, insurers may request a higher premium for cover (a process known as rating
a risk) or exclude certain risks from the policy offered, or they may offer a different form
of insurance. Occasionally, insurers will decline or defer but this is a small percentage of
risks and the goal for insurers is high acceptance rates.
Progress towards higher acceptance levels owes much to continuous improvements

in medical practice and corresponding improvements in mortality, which are constantly
integrated into risk classification guidelines. This affords consumer access to private
insurance for far more people today, and at a significantly cheaper price, than, say, two
decades ago (as Figure 1.2 illustrates). Private insurance is a competitive marketplace:
if the insured can find better terms with another insurance company for cover, he or she
is free to cancel the policy at will. Commercial pressure and underwriting are therefore
key drivers of affordable and competitive premium rates in the interests of the consumer.

Figure 1.2 100 Benchmark index

Life insurance costs have fallen significantly
in recent decades, making life insurance
affordable to more consumers
80
60
40
March 04
March 06
February 95
August 95
January 97
August 97
January 98
August 98
February 99
August 99
February 00
September 00
March 01
July 94
July 96
March 05
January 94
January 96
March 03
Level term assurance, amount GBP 300 000
Level term assurance, amount GBP 100 000
Source: Swiss Re Term & Health Watch 2006, based on data from The Exchange quotes system
The graph shows movements in premiums for that premium rates for the chosen model points
life term insurance in the United Kingdom fell, on average, by more than 30% from 1994
(base = 100 as at January 2004). This shows to 2006.
1.3 Medical information considered in the underwriting process
The underwriter’s role is to look at the best information available and to arrive at a
conclusion that is fair, both to the individual and to the pool.
A number of factors can be statistically shown to affect the overall risk within a
particular pool. For example, on a simple life insurance policy there are three main
factors affecting how long the person applying for insurance might expect to live:
̤̤ age – for adults, the risk of dying (mortality risk) increases with age;
̤̤ gender – females live, on average, longer than men, meaning that fewer die at
younger ages; and
̤̤ health – past illness and current health may affect life expectancy.
There are a number of additional factors that have an impact on the risk insured and on
which an underwriter may wish to collect information. These include smoker status and
other lifestyle factors, marital status, residence, height/weight, family history, financial
status and occupation.
Insurers use proposal forms to collect information on such risk factors, which range
from a series of simple questions to a fully detailed health questionnaire, with the level
of detail depending on the product and sum assured and possible risk of anti-selection.
Where the applicant’s responses highlight areas for further investigation, or if the
application falls outside certain age and amount-assured limits, further information will
be required.
The underwriting process may also involve a medical examination by a paramedical

examiner or a physician, either to clarify a piece of information disclosed by the customer
or because the amount assured exceeds a limit set according to the age of the applicant
and the type of product being purchased. Table 1.3, derived from a client survey
performed by Swiss Re, illustrates the types of limits that may be applied.

Table 1.3 Age Criteria % used Mode Median Highest
US medical limits survey 2004 35 UA 100% 100 000 100 000 3 000 001
55 UA 100% 100 000 50 000 150 001
75 UA 100% 0 0 100 001
35 BLD 100% 100 000 100 000 500 000
55 BLD 100% 100 000 100 000 250 000
75 BLD 100% 100 000 50 000 250 000
35 PM 83% 100 000 100 000 5 000 001
55 PM 83% 0 50 001 1 000 001
75 PM 73% 0 0 1 000 001
35 ECG 75% 1 000 001 2 000 001 10 000 001
55 ECG 100% 500 001 500 000 2 000 001
75 ECG 100% 100 000 100 000 1 000 001
35 APS 55% 1 000 000 1 000 001 10 000 000
55 APS 62% 1 000 001 1 000 001 10 000 000
75 APS 74% 0 25 000 1 000 001
APS – attending physician statement PM – paramedical exam

BLD – blood profile UA – urine analysis
ECG – resting electrocardiogram
Evidence limits in the United States are lower largely to the fact that body fluid testing is
compared with many other markets, owing available at low cost.
Other tools, and among the more comprehensive sources of medical information, are
the medical practitioner report (MPR) and attending physician statement (APS). Here,
the insurer obtains written permission from the applicant to seek additional information
from existing medical records. Further underwriting tools include blood, urine or saliva
tests, and electrocardiograph (ECG) testing.
Insurers and reinsurers also employ medical specialists, known in the industry as Chief
Medical Officers (CMOs), to advise underwriters in the interpretation of often complex
medical information. CMOs can also provide assistance to the underwriter by assessing
the likely course of a disease and the implications this has for the applicant’s future
mortality or morbidity.
For the underwriter to apply a rating effectively and fairly to risks presented by individuals,
the information relevant to the risk must be transformed into a numerical risk-classification
system. Where medical risk factors are concerned, the information used in this risk-
classification process stems from experience data derived from existing insurance
portfolios, medical literature and other sources of epidemiological data.
An insurer should ensure that its risk-classification system is fair and reasonable.
If customers felt that the ratings were unfair, they would be discouraged from buying
the cover and would shop around for a provider offering better ratings. Therefore,
the underlying risk-classification system is key to a competitive private life insurance
system. The ratings developed for the various risk factors and impairments form
the basis of underwriting manuals, such as Swiss Re’s Life Guide, which are used by
insurers as part of the day-to-day underwriting process.

1.4 Level of underwriting evidence
As has been explained above, the commercial nature of private insurance drives product
providers to cover as many people as possible, at a fair yet competitive price, and deliver
on shareholders’ expectations. Underwriters therefore remain under constant challenge
to justify the usage of additional evidence. In practice, however, there are practical
constraints upon the number of risk factors on which information can be sought, including:
̤̤ the cost of obtaining the information;
̤̤ the cost of processing the information by highly trained individuals; and
̤̤ commercial and competitive restraints, for example cover that can be provided with
fewer underwriting questions typically sells better but will lead to a higher claims
experience, which means higher premiums.
Consequently, short proposal forms (known as simplified underwriting) can be

considered for certain forms of insurance, where the risk of anti-selection is low. This
includes policies where the primary purpose is investment rather than protection.
At the opposite end of the spectrum are what the industry calls preferred products,
which require more evidence than normal. The concept of preferred risks originated
in the United States and involves granting reduced premium rates to life insurance
applicants who are in good health and have a healthy lifestyle. Such people typically
experience substantially lower mortality rates than others who qualify for standard
rates.
One of the first forms of preferred risk selection to be introduced was that of separate
premiums for smokers and non-smokers. The preferred risk concept was then developed
further by making use of additional risk factors such as height/weight, blood pressure,
cholesterol, family history, lifestyle and assets. Whilst the United States is the most
sophisticated in terms of the stratification of risks, preferred products exist in some form
or another in other markets. The basic principle is for the standard group of risks to be
split up into preferred subclasses. The decision as to how many preferred classes are
introduced and what requirements are necessary for those preferred classes is based
upon market size, access to underwriting information, pricing factors, marketing
considerations and consumer acceptability.
The next chapter focuses on the legal and regulatory restrictions present in various
markets and examines the trends that have been steadily evolving over the past three
decades, serving to limit the amount of information available to private insurers.
The price for a standard risk may vary from insurer to

insurer, and according to the characteristics of the target
group at which it is aimed. Underwriters examine the
individual risks presented against the assumptions made
for standard premium rates in order to arrive at a fair
premium for the applicant.

2. Risk selection and the regulatory environment
In recent years, life and health insurers have become accustomed to closer scrutiny of
their business processes by regulators, special interest groups and consumers. Increas
ingly, regulatory bodies are eager to ensure that insurers justify any differentiation in the
way they price cover between different risk profiles.
Through various well-intended regulations and laws, underwriters are increasingly

facing constraints on access to information known to consumers about their risk profile
– information which may well influence applicants’ insurance buying habits and their
propensity to claim.
The past three decades has seen a steady evolution of

laws limiting the amount of information available to private
life and health insurers about the risks they seek to insure.
In the 1990s, in response to increasing fears of a global AIDS epidemic, insurers
tightened their underwriting practices and requested HIV tests for applicants at lower
sums assured. In response, insurer’s were challenged to justify this approach.
In the midst of this HIV debate, medical research began to identify disease-causing
mutations in genes associated with severe hereditary diseases, such as Huntington’s
disease, cystic fibrosis and familial breast cancer. The fear that insurers would require
applicants to undergo genetic testing, similar to HIV testing, and possibly discriminate
against them based on genetic information, initiated an ongoing public debate about
the use of genetic data by insurers. The important link between HIV and genetic
predisposition is that both may confer on the individual a risk of developing a disease
in the future without currently showing any symptoms. These debates have both been
key catalysts in turning discrimination, privacy, and entitlement into key regulatory
issues for insurers.
Discrimination
Depending on the market concerned, insurers will, or may, be prohibited from rating
on the basis of unfair discrimination in the areas of race, gender, sexual orientation, age,
health and genetic make-up. Alternatively, they may be required to justify any ratings
they apply. Discrimination in employment may also be subject to restrictions, directly
or indirectly affecting private insurers in the area of group cover.
Privacy law
Private insurers may be restricted from making certain types of enquiry into confidential
information from applicants. They may also face rules around the way such information
is stored or to whom information may be passed, and rules governing an individual’s
right of access to any data stored about him or herself.
Entitlement
In some markets, there may be the view that access to insurance is a basic human right
for all citizens to enjoy. This view tends to apply in regions where there is a high degree,
or recent history, of social insurance provided by the state. When changes in government
policy move provision away from the state and towards private cover, the stakeholders
involved frequently find it difficult to come to terms with the new arrangements:
regulators struggle with allowing private insurance companies to fully differentiate
between risks; insurers are reluctant to offer cover on the same terms as the state
previously did (ie without differentiation); and consumers may find access to cover
becomes limited or more expensive.
These three issues are discussed in more detail in the following sections.

2.1 Discrimination
The word discrimination is normally associated with a negative bias (when people hear
the word they tend to hear unfair discrimination). However, discrimination in the true
sense of the word is neutral. Discrimination can equally be fair. As covered in Chapter 1,
insurers have traditionally pursued actuarial fairness, by which policyholders are
charged a premium in accordance with the risk they bring to an insured pool. Increasingly,
there is pressure for insurers to justify premium rates to the extent that, in some cases,
the very basis of actuarial fairness is challenged.
Disability discrimination legislation is common around the world. The primary aim of the
regulator is to promote the rights of those with a disability to participate equally in
all areas of life. It does this by making it unlawful to discriminate against a person with
a disability, including the area of insurance. However, this may conflict with private insur
ance risk classification, because underwriting involves differentiation between people on
the basis of a risk assessment, which may be influenced by a person’s disability. Therefore,
regulators typically grant exemptions to the private insurance industry if insurers
can provide actuarial evidence or expert opinion to support underwriting decisions1.
Challenges to actuarial fairness are evidenced, for example, by pressure not to apply
additional ratings for medical expenses insurance, and by the willingness on the part
of legislators to deny insurers access to genetic or other medical information. In such
circumstances, the law effectively leads insurers to cross-subsidise between groups
of policyholders and to put themselves at risk of anti-selection, which can lead to price
increases and, ultimately, to the potential withdrawal of certain products.
Constitutional rights in a given territory may provide guiding statements, but will not
typically be very precise and may not directly refer to discrimination or human rights.
Anti-discrimination measures are more likely to be enshrined in legislation. In many
countries, and over many years, legal frameworks have been designed to protect
people from discrimination based on various grounds or attributes, or to outlaw
discrimination in various areas of activity. Examples of these are shown in Table 2.1.
Table 2.1 Examples of grounds or attributes Examples of areas of activity

Examples of grounds, attributes and areas of Age Education
activity defined in anti-discrimination legislation Disability Employment
Gender Provision of accommodation
Marital status Provision of goods and services (eg insurance)
Parental status
Political beliefs
Pregnancy
Race
Religion
Sexuality
1 S
ee the Australian Disability Discrimination Act 1992, Section 46. The exemption is similar to the one used in
the Australian Age Discrimination Act 2004 shown in the box on page 14. For more information, visit the
Australian Human Rights and Equal Opportunity Commission website: www.hreoc.gov.au/legal/index.html.

2 Risk selection and the regulatory environment
In countries that have legislation against unfair discrimination, the law has typically
evolved over time in order to build an overall framework. A good example of such an
anti-discrimination framework is Australia 2 where the following federal laws were
implemented over time:
̤̤ Racial Discrimination Act 1975;
̤̤ Sex Discrimination Act 1984;
̤̤ Human Rights Commission Act 1986;
̤̤ Disability Discrimination Act 1992; and
̤̤ Age Discrimination Act 2004.
For discrimination not to be unlawful, generally speaking an act or omission must be

covered by an exception, exemption or defence. To take an example from the list above,
Australia’s Age Discrimination Act 2004 specifically allows age discrimination where
insurers and pension providers can justify their actions based on the reasonable use of
available actuarial data (see box) – data of the type described in Chapter 3 of this
publication.3
Age Discrimination Act 2004 – Section 37, Australia
Superannuation and insurance

This Part does not make it unlawful for a person to discriminate against another person,
on the ground of the other person’s age if the following condition is satisfied:
(a) the discrimination:

(i) is based upon actuarial or statistical data on which it is reasonable for the
first-mentioned person to rely; and
(ii) is reasonable having regard to the matter of the data and other relevant
factors; or
(b) in a case where no such actuarial or statistical data is available and cannot
reasonably be obtained – the discrimination is reasonable having regard to any
other relevant factors.
Note: The Commission and the President can require the disclosure of the source of the
actuarial or statistical data.
Similar legal frameworks are found in other countries. In general, governments aim
for a harmonised approach across regions or territories and between comparable legal
systems. For example, Australia’s legal system is similar to the United Kingdom’s.
The anti-discrimination framework in the United Kingdom 4 is as follows:

̤̤ Sex Discrimination Act 1975;
̤̤ Race Relations Act 1976;
̤̤ Disability Discrimination Act 1995/2005;
̤̤ Human Rights Act 2000; and
̤̤ Employment Equality (Age) Regulations 2006.
These have been largely replaced by the Equality Act 2010.
2 www.hreoc.gov.au/legal/index.html.
3 By way of contrast, an example of a law less favourable to insurers is the New Zealand Human Rights Act
(1993), which prohibits an insurer from declining a risk and imposes standards on the quality of data the
company must use in making underwriting assessments.
4 www.direct.gov.uk and www.equalities.gov.uk.

Alongside the United States, the most obvious example of regulatory harmonisation
is the European Union’s (EU) legal system, which produces directives to set minimal
standards across all member states for transposition into their national law.
Laws can spread from one country to another; this is

particularly prevalent within federal jurisdictions such as the
EU and the US where there is a drive for harmonisation.
EU Gender Directive
An example is the EU Gender Directive5, which applies to services such as housing,
banking and insurance on the condition that the activity is private, voluntary and separate
from the employment relationship. Member states had to transpose the measure into
national law by 21 December 2007. The principle driving the directive was gender
equality, but an exemption under article 5 (2) permitted proportionate differences in
individuals’ premiums and benefits where the use of gender is a determining factor in
the assessment of risk. Any different treatment must be based on relevant and accurate
actuarial and statistical data, which has to be made public and regularly updated.
This directive was legally challenged by a Belgian consumer association (Test Achats),
and the ruling from the European Court of Justice (ECJ), on 1 March 2011, stated that
article 5 (2) is invalid with effect from 21 December 2012.
The EU insurance industry awaits further clarification from the EU Commission with
regard to guidance and details as to the implementation of this change to unisex rates.
This outcome and the debate around the use of gender in pricing insurance has
potential implications for other risk factors such as age and disability.
Legislation against discrimination on the grounds of genetic information

Another example of legislation against discrimination concerns genetic information.
From a medical perspective, the use of genetic tests for pre-symptomatic patients to
identify a future disease is possibly the most promising development ever for clinical
medicine. One important question for medical doctors is whether predictive genetic
tests are different from other predictive medical tests. It has been argued that predictive
genetic tests are equivalent to other predictive medical tests, and therefore that in
clinical practice they should be treated using the same standards, including standards
of privacy 6.
The legislative process is accelerating in many markets

due to increased public debate around the social and
health care implications of genetics.
5 European Council Directive implementing the principle of equal treatment between men and women in
the access to and supply of goods and services (2004/113/EC of 13 December 2004).
6 Green MJ, Botkin JR. “Genetic exceptionalism” in medicine: clarifying the differences between genetic and
nongenetic tests. Annals of International Medicine, 2003; 138: 571–575.

The same applies to private insurance, but here the debate extends beyond the issue of
privacy. The enthusiasm spread by scientists about the possibility of predictive genetic
tests has raised many ethical issues about discrimination based on predictive genetic data.
In many countries, this has led to the use of genetic information in life and health
underwriting being regulated by law. However, as illustrated in Table 2.2, the approach
taken by different governments is far from uniform, and can be separated into four main
categories (one or more of which may apply in a given market).
Human rights
Under the most basic of approaches, private insurers are permitted access to genetic
information but regulations cover the privacy and confidentiality of all medical
information and aim to protect basic human rights. The same strict measures apply
to genetic and other medical information. This approach is found in several US states
and is also common in eastern Europe and parts of Asia.
Moratorium
In some countries, insurers have agreed a voluntary moratorium not to use genetic data
until government finds a solution. This approach is used in Europe.
Limitation by law
Some countries may limit access to genetic information for some forms of health insur
ance, but allow it for life insurance. The US has adopted this type of regulation. Other
countries may only allow access to genetic data where the amount assured is above
a certain threshold, which varies in different countries and for different insurance
products. This type of regulation is also common in Europe.
Ban
Governments may prohibit insurers from using genetic data for insurance purposes.
In some countries this may only prevent insurers from asking consumers to take tests
as a prerequisite to an insurance contract, but in others insurers may be denied access
to existing test results. Access to existing genetic test results is prohibited in some
European countries, but generally not elsewhere. It is rare for access to family history
data of any kind to be denied.

Table 2.2
Main regulatory approach towards private
insurers’ access and use of genetic data in
selected markets
Human Limitation
Country rights Moratorium by law Ban Comment relating to private insurance
Australia X No specific genetic test law has been enacted. Life insurers comply
with FSC Genetic Testing Policy No. 11 (2001/2005), which allows
insurers to use existing genetic test results
Austria X T he Gene Technology Act (1994/2005) prohibits insurers from obtaining,
requesting, accepting or in any other way making use of the results of
gene analyses on their policyholders or insurance applicants
Belgium X The law on terrestrial insurance contracts (1992) states that the results
of existing genetic tests which determine the future state of health
cannot be made available to insurers, even where this would be to the
benefit of the applicant
France X The Code de Santé Publique (2002) prohibits the use of test results of
genetic characteristics of a person for insurance purposes
Germany X According to the law of genetic engineering predictive testing informa-
tion is permitted only to be requested and used where the sum assured
exceeds the amount of EUR 300 000. No restrictions apply on the
use of diagnostic genetic test results per annum. No restrictions apply
to diagnostic genetic tests
The Netherlands X The moratorium (1990/1995) was linked to the protocol on medical
examination in 2004, as a result of the evaluation of the Medical
Examination Act (1998). Insurers must not ask for, or use, results of
predictive genetic tests where the total amount assured is below
EUR 160 000 for life insurance, and annual benefits of below treatment
after testing. No restrictions apply to diagnostic genetic tests
Portugal X The Genetic Information Act (2005) prohibits insurers from obtaining,
requesting, accepting or in any other way making use of genetic
data (including family history data) on their policyholders or insurance
applicants
Sweden X Agreements made between the government and the Swedish Insurance
Federation (1999/2004) state that, for individual private life and
health insurance, family history information and predictive genetic test
results will not be requested or used for total amounts assured
SEK 171 204 for an annuity benefit or SEK 1 284 000 for a lump sum.
No restrictions apply to diagnostic genetic tests
Switzerland X The law regarding Genetic Investigations in Humans (2004) states in-
surers are not allowed to request predictive genetic tests for insurance
purposes. No restrictions apply to diagnostic genetic tests. Private
life and disability insurers will be allowed to obtain and use existing test
results where the total amount insured on all policies exceeds
CHF 400 000 for life insurance or CHF 40 000 per annum for disability
insurance, and the decision is actuarially justified
United Kingdom X The Concordat and Moratorium of Genetics and Insurance states that
private insurers should not require customers to disclose the results
of predictive genetic tests for polices with a total amount assured of up
to GBP 500 000 for life insurance or GBP 300 000 for critical illness
insurance, or annual benefits of up to GBP 30 000 for income protection
insurance. No restrictions apply to diagnostic genetic tests. This was
introduced in 2001 and is due to run to at least 2017
United States X Genetic legislation in the United States focuses on the prohibition of
genetic discrimination in employment and medical insurance. At a
Federal level medical insurance plans are prevented by law from using
any genetic information (The Genetic Information Nondiscrimination
Act, H.R. 493, 2008). Legislation varies at state level reflecting different
approaches to the need for consent and actuarial justification
Generally the regulator aims at protecting the freedom of the consumer predictive tests but want access to the same information that applicants
not to know his or her propensity to disease and therefore does not have, for so-called symmetry of information. However, there are few
allow insurers to ask applicants to undergo predictive genetic tests. restrictions on the use of diagnostic genetic test results, or on the use of
Moreover, access to existing predictive genetic test results may be family health history information by life insurers.
restricted. It should be noted that insurers do not want to insist on

Probably the most important international regulation relevant in this context is the
Council of Europe Convention on Human Rights and Biomedicine No. 164 (1997) 7.
Relevant extracts from this convention are shown in the box.
Council of Europe: Convention on Human Rights and Biomedicine

No. 164 (1997)
Article 10 – Private life and right to information

Everyone is entitled to know any information collected about his or her health. However,
the wishes of individuals not to be so informed shall be observed.
Article 11 – Non-discrimination
Any form of discrimination against a person on grounds of his or her genetic heritage
is prohibited.
Article 12 – Predictive genetic tests

Tests which are predictive of genetic diseases or which serve either to identify the
subject as a carrier of a gene responsible for a disease or to detect a genetic
predisposition or susceptibility to a disease may be performed only for health purposes
or for scientific research linked to health purposes, and subject to appropriate genetic
counselling.
In countries that have ratified the convention, insurers are not allowed to ask an
applicant to undergo a predictive genetic test but may ask for a diagnostic genetic test.
Diagnostic tests are used to confirm present disease symptoms; predictive genetic tests
may be used to determine future propensity towards a disease in someone not currently
displaying symptoms. Moreover, insurers are unable to unfairly discriminate on the
basis of genetic heritage, meaning that they must justify the ratings they apply. The
convention does not prohibit insurers from asking for existing results of predictive
genetic tests.
So far, most of the 25 countries 8 that have ratified the convention and implemented it
into national law believe that the level of public trust in current health data protection
law is sufficient.
In countries that have decided to limit access to genetic data using one of the other
regulatory approaches described above, the insurance industry has faced the following
problems:
̤̤ the term insurance may not be defined, making it impossible to distinguish
private and social insurance;
̤̤ there is no clear and consistent definition of what constitutes a genetic test and
genetic information; and
̤̤ there may be no distinction between diagnostic and predictive genetic tests.
7 www.coe.int/t/dg3/healthbiothic.
8 www.coe.int/t/e/legal_affairs/legal_co-operation/bioethics.

18
2.2 Privacy law
In modern life, it is becoming increasingly difficult for an individual to live a private life.
E-mails are tracked, and surveillance cameras monitor public spaces and even the
workplace. The arguments used to justify this interference into personal privacy centre
around the wider benefits of protecting people and property. Any regulatory framework
must find a balance between ethical, social and commercial justifications.
The same applies to health data, which the insurance industry has obtained and pro
cessed as long as life and health insurance has existed. A core responsibility of private
life and health insurers is to handle medical and other personal data with great care and
professionalism.
The debate involving insurers in the context of AIDS and HIV led to an increase in the
overall data protection standards applied by the industry, to the extent that in many
markets HIV test results are now dealt with in a separate process which guarantees the
highest confidentiality of this data. Similarly, separate processes have been developed
by insurers to deal with genetic data. For example, under the Association of British
Insurers (ABI) Code of Practice on Genetic Testing 9, insurance companies must have
a documented set of practices in place to ensure that confidential information about
their customers (including medical and lifestyle information) is held securely. Further,
these practices should conform to the UK Data Protection Act 1998 10.
Insurance companies have a strong track record of adhering to these guidelines and
treating their clients’ information in the strictest confidence.
Family history data protection

The issue of whether insurers should have access to genetic data is further complicated
by the argument that all diseases are influenced by our genetic make-up. The concern
here is that any medical test result that relates to a possible future health outcome will
reveal information of a genetic nature 11. Taking this thinking a step further leads to potential
challenges for private insurers about the overall medical risk assessment process,
including challenges over the use of family history information.
Similar to the medical profession, the life insurance industry has for more than 150 years
asked questions about the occurrence of disease in close family members including
parents, siblings and grandparents. One example goes back to 1848, where the
Canada Life Assurance Company’s medical examination form addressed the family
member health status as follows 12:
“Has he, in your opinion, any hereditary predisposition to any disease; and if so, to
what?”
“Can you state anything respecting the health of his parents or relatives, with which
the Directors of this Company should be made acquainted? If so, what?”
9 www.abi.org.uk; for a further example see the code of practice by the Association for Savings & Investment
SA (ASISA): www.asisa.co.za.
10 Office of Public Sector Information (OPSI): www.opsi.gov.uk.
11 Nabholz CE, von Overbeck J. Gene-environment interactions and the complexity of human genetic diseases.
Journal of Insurance Medicine, 2004; 36:47–53.
12 Caplan J. A life insurance medical, 1848. Canadian Medical Association Journal, 2003; 169:1331–1332.

Regulators have started to question the process of private insurers obtaining family
history. Their concerns include:
̤̤ personal health information may be revealed about a family member without the
consent of that person;
̤̤ family history information gathered systematically reveals genetic information;
̤̤ the information revealed may not be statistically relevant; and
̤̤ the data may be used to underwrite applications of family members.
The insurance industry has reacted to these challenges by making the questions asked
of applicants more specific. A current example – the medical examination form of
the Swiss Insurance Association – uses one of its 22 questions to address the family
member health status as follows:
“Have your parents, siblings or grandparents had any diseases of the nervous system,
cardiac diseases, strokes, diabetes, cancer or hereditary diseases before the age of 55?”
The question now addresses the types of concern expressed by regulators in that:
̤̤ because it does not extend to cousins, it is less systematic than a family case history
used for medical purposes;
̤̤ the direct relation to the applicant is not revealed, and the group is large enough
that the information can be considered non-identifiable;
̤̤ the data gathered is statistically relevant for the diseases in question; and
̤̤ the family history data canvassed is based on both genetic and environmental
influences shared by family members.
Most countries accept that insurers ask for family history; this long-recognised risk factor
is particularly relevant for critical illness business. Some countries have regulated the
way insurers are allowed to ask for the data, such as the Netherlands 13 and Norway 14,
and insurers have responded by introducing criteria similar to those developed by the
Swiss Insurance Association. However, others such as Portugal have taken a very strict
approach and do not allow insurers to ask for family history information 15.
2.3 Entitlement
Entitlement refers to a belief that access to insurance is a human right. The most important
arena for the entitlement debate is in the area of medical and health insurance, and to
some degree in life assurance cover where it protects mortgage and other loan obliga
tions. This is part of the wider issue of social insurance and the difference between
private and state provision. Generally, where provision is made by the state, benefit
entitlement is driven by social need rather than by any ability to pay premiums. Where
changes of government policy move insurance from the public to the private sector, or
where individuals choose to provide their own cover beyond what the state offers, it
may prove unacceptable for insurers to exclude those who would have been covered
by the state insurance scheme – despite the fact that the landscape for insurance
provision has shifted to a private contractual basis.
13 Medical Examination Act (1998) and its self-regulation articles: www.verzekeraars.nl.

14 Biotechnology Act No.100 (2003): www.bion.no/biotech_regulations_eng.shtml or www.bion.no/english.
15 Genetic Information Law No.12 (2005): bdjur.almedina.net.

Many markets are trending towards the privatisation
of welfare provisions – but with governments aiming
at socialising the private insurance sector rather
than subjecting people’s access to insurance to strictly
commercial dynamics.
Laws designed to prevent unfair treatment of individuals in their selection for employment
can also impact individual private insurance products. In the Netherlands, for example,
legislation exists to prevent employers from discriminating according to the health of
potential employees 16; the law works by preventing employers from collecting any
medical information on new hires. Employers are also obliged to provide employees
with certain types of insurance cover – primarily pensions and disability products, the
latter being an area where the government has progressively moved the onus of provision
from the state onto the employer – this means that insurers have to provide cover
without being able to obtain full medical evidence. This causes particular problems for
very high levels of cover and for small schemes where the chief beneficiary may decide
the level of cover.
Ultimately, these trends lead to a more fundamental question of availability. The increas
ingly multinational reach of many insurance companies makes it easier for the major
product providers to withdraw from markets where they are unhappy about the
restrictions imposed by legislators – as private companies, with shareholder expectations,
such a step by an insurer is not beyond the realms of possibility. This, many would argue,
is ultimately to the detriment of society as a whole.
Legislation is increasingly obliging insurers to convince

regulators that the ratings used in the underwriting process
are actuarially justified.
In summary, despite the significant overall reduction in the price of private life insurance
cover that consumers have enjoyed over the years, the past three decades have seen a
steady evolution of laws that limit the amount of information available to private life and
health insurers about the risks they seek to insure. In the next chapter we will examine
how medical information is translated into the risk classification of impaired risks
and the process used to keep these risk factors up-to-date with advances in medicine.
16 Wet op de Medische Keuringen Medical Examination Act (1997) and associated articles: www.verzekeraars.nl.

22 Fair risk assessment in life & health insurance
3. Evidence-based ratings and their application
As set out in Chapter 1, and explored throughout this publication, the ability of insurers
to select and quantify risks is fundamental to life and health insurance.
The use of reliable, evidence-based rating guidelines

is the cornerstone of risk assessment by life and health
underwriters.
The core procedures involved are product pricing and underwriting. Actuaries set the
basic price that an individual applicant pays by modelling claims experience data and
by identifying mortality trends with respect to age, gender (where allowed) and often
smoker status. Applicants who present a history of poor health, perhaps a previous
heart attack, or an abnormal risk factor such as high blood pressure, or who undertake
a high-risk occupation or leisure activities, may bring to the pool a level of risk that
is substantially higher than that of the standard risk group. In such situations the risk
is regarded as substandard in insurance terms and an additional risk premium,
proportionate to the level of risk, may need to be paid.
These extra charges are called ratings. At an extreme, the risk can be so high that it is
regarded as uninsurable (in which case the application is typically declined or postponed).
The decision whether an applicant is standard, substandard or uninsurable is made
by an underwriter using risk selection guidelines set out in a life and health underwriting
manual.
In recent years, re/insurers have come under increasing pressure to defend decisions to
rate or decline an applicant, and to justify the ratings recommended in their underwriting
manuals. Reinsurers’ manuals play an important part in risk selection and therefore are
subject to ever-closer scrutiny: as discussed in Chapters 1 and 2, consumers, interest
groups and regulators are progressively challenging the industry’s overall right to under
write and are demanding proof that it is not discriminating unfairly against consumers.
Without a formalised approach to data collection and standardised analytical methods,
the ratings applied by re/insurers could be questioned as to their fairness, accuracy
and validity.
Evidence-based underwriting requires both a well-trained

assessor and reliable, up-to-date, fully researched and
peer-reviewed guidelines suitable for the purposes of fair
risk assessment.
In response, reinsurers such as Swiss Re continuously and critically evaluate their
prevailing risk ratings to produce up-to-date, evidence-based rating (EBR) guidelines
that, coupled with skills and knowledge, an underwriter can use with confidence in
assessing whether to apply a rating. The provision of an underwriting manual is
considered by direct insurers to be a key part of a reinsurer’s value proposition, to the
extent that the quality and depth of the manual can influence the choice of reinsurer.
The guidelines are produced using data from clinical and insurance literature, as well as
the findings of experience studies analysis. The result is a risk classification process that
is carried out fairly, with regard to all interested parties – including the applicant and
those who are already members of the risk pool.

3.1 Evidence-based medicine: a model for the evidence-based

rating approach
“Each year Medline indexes over 560 000 new articles, and Cochrane Central adds
about 20 000 new randomised trials. This is about 1 500 new articles and 55 new
trials per day!” 17
In clinical practice there is an increasing appetite for the practice of evidence-based

medicine (EBM). The practice of EBM has been described as:
“… the conscientious, explicit and judicious use of current best evidence in making
decisions about the care of individual patients. The practice of evidence-based
medicine means integrating individual clinical expertise with the best available
external clinical evidence from systematic research.” 18
With some changes of wording, expressed here in italics, this definition provides a
suitable basis to describe the practice of evidence-based underwriting:
Life and health underwriting requires … the conscientious, explicit and judicious use of
current best evidence in making decisions about morbidity and mortality risk. The
practice of evidence-based rating (EBR) means integrating underwriting expertise with
the best available clinical and insured-lives evidence from systematic research.
The guidelines provide the evidence and the underwriter provides the expertise. In both
EBM and in the production of EBR guidelines, the evidence has to be gathered, analysed
and presented in a useable form which the underwriter or clinician can apply with
confidence.
The amount of medical information from which to derive ratings is increasing exponen
tially, making it challenging for an underwriter or physician to collect, collate, interpret
and use these available resources. Ensuring that underwriting guidelines are up-to-date
is not always easy, as the source materials such as medical textbooks may not reflect
current thinking and practice or, indeed, may represent one opinion out of many 19.
To mitigate these problems in clinical practice, systematic reviews designed to collect

and analyse clinical studies are increasingly being used in order to produce a base of
up-to-date evidence upon which doctors can make clinical decisions. Such reviews of
the clinical literature are published in a number of journals aimed at medical doctors 20.
17 Glasziou P, Haynes B. The paths from research to improved health outcomes.

Evidence-Based Medicine, 2005; 10: 4–7.
18 Sackett D L et al. Evidence-Based Medicine: what it is and what it isn’t.
British Medical Journal, 1996; 312: 71–2.
19 Sackett D L et al. Evidence-Based Medicine: how to practice and teach.
Evidence-Based Medicine 2nd edition, Churchill Livingstone, London, 2000.
20 For example Evidence-Based Medicine (ebm.bmjjournals.com), Clinical Evidence
(www.clinicalevidence.com) and the Cochrane database (www3.interscience.wiley.com).

Similar to this EBM approach, Swiss Re has an ongoing process of collecting and
reviewing the evidence presented in both clinical and insurance literature, along with
available insured-lives datasets (ie experience studies). This seeks to achieve an up-
to-date, referenced and peer-reviewed analysis of the long and short-term prognosis of
diseases and associated clinical risk factors. The EBR guidelines produced from these
reviews form the basis of the risk classification system provided by Swiss Re’s Life
Guide underwriting manual.
A broadly based life and health underwriting manual such as Life Guide contains more
than 400 medical topics and includes rating guidelines for a broad range of life and
health products. To systematically review all of these is a significant undertaking and
priorities have to be set. The factors that influence how a systematic topic review is
addressed are shown in Figure 3.1.
Figure 3.1 Request made to review/ Mortality and morbidity

Factors that influence an evidence-based (Legal) challenge received
research existing ratings analyses and review
rating topic review
Regular topic review Evidence-based risk

Relevant paper published
database
Underwriting manual
The most important factor is regular topic is associated with no, or a limited, increase in
review. This is based on how often the risk; such impairments may be of low preva
respective impairment rating pages of the lence yet important because of misunder
manual are used (which is easy to ascertain standing about the level of the risk. Sometimes
with web-based versions such as Swiss Re’s an underwriter will request a review following
Life Guide) and their relevance to mortality feedback from users. On rare occasions, a
and morbidity. Cardiovascular risk factors and change in medical opinion or the introduction
diabetes mellitus will be reviewed more often of a novel ICD code (International Classification
than a rare disorder such as Wilson’s disease. of Diseases) will prompt a reassessment of
However, a rating is more likely to be challenged the approach to risk selection.
if the applicant believes that an impairment

3.2 The process of developing evidence-based rating guidelines
As illustrated by Figure 3.2, carrying out a systematic review is an ordered cascade.

A number of key aspects of this systematic process are described in more detail in the
following subsections.
Figure 3.2 1. Select topic

The EBR systematic review process 2. Gather data/review literature
3. Assess study/data quality and strength of evidence
4. Analyse and interpret results
5. Produce background paper containing:
 methodology and detailed analysis
 implications of the findings for risk ratings, and
 recommendations for new ratings if required
6. Review by secondary reviewer
7. Issue for global peer review
 critique of the methodology and detailed analysis
 assessment of implications of findings for local market
 recommendations for new ratings for local market practice if required
8. Finalise background paper
9. Amend underwriting manual if necessary
Once the topic is selected, the investigator risk selection, recommend a rating and justify
has to identify and select relevant prognostic the rating – which can subsequently be
studies, carry out a mortality and morbidity included in the underwriting manual for under
analysis and write a peer-reviewed paper, the writers to apply in day-to-day business.
purpose of which is to develop a method of
Topic selection
The most important criteria for topic selection is the frequency of use of those pages of
the underwriting manual which cover the impairment rating in question, and the degree
of relevance of the contents of those pages to mortality or morbidity. Taking Life Guide
usage in the UK market as an example, analysis of the use of ratings pages shows that
mortality ratings are the most frequently accessed and that cardiovascular (CVS) risk
factors, diabetes mellitus, abnormal liver function tests and breast cancer ratings pages,
in descending order, are the most commonly used. However, this is influenced by the
region under consideration. In East Asia, by contrast, although CVS risk factor pages
remain the most commonly used, hepatitis B ranks second.
The most frequently accessed ratings are given priority in the systematic regular topic
review process and, because of their importance, these ratings may be revisited before
less common topics are formally evaluated. However, as indicated earlier in Figure 3.1,
other factors such as a query from a client company which may be facing a challenge
to its ratings can prompt a change to the topic review schedule.

Data gathering and evaluation
Primary responsibility for the review falls to an underwriter or Chief Medical Officer
trained to carry out this work. He or she may be supported by a team if the topic is large.
For example, a review of coronary artery disease is challenging because classification
of the prognostic factors for the purposes of underwriting is complex: it depends upon
the extent of disease within the coronary arteries, the age of applicant, the degree of
damage (if any) to the heart, the modes of both invasive and non-invasive treatments
and the presence and degree of cardiovascular risk factors (lipids, smoking,
hypertension, diabetes and family history).
The most important task is the identification of the relevant evidence that can be used
to develop an insurance risk model. The EBM literature contains some excellent
descriptions of the processes involved in carrying out 21,22,23 or critically analysing 24 a
systematic review. These can be adapted by re/insurers to identify appropriate clinical
articles where there is prognostic information with adequate follow-up of a large number
of subjects. The clinical evidence is usually obtained via on-line medical literature data
bases such as Medline and Embase; these have standardised search methodologies
for studies of disease outcomes.
In EBM, randomised, controlled, double-blind trials are the most widely accepted credible
standard because such studies reduce bias. Patient selection for this type of trial is often
an advantage for insurance risk analysis as participants tend to be more homogeneous
and healthier than the average patient with the condition under consideration (thereby
reflecting the relative health of insurance applicants compared with the general popula
tion). If studies report long-term follow-up of participants, they are especially valuable
for EBR review purposes – although further data manipulation is required to transform
event rates (mortality rates, disease or disability incidence) into insurance relevant data,
such as mortality ratios, which can be used to develop rating guidelines 25.
The other major, and probably most useful, source of information is insured-lives data or
published reports of insurance industry experience which study the outcomes of those
accepted for insurance. Valuable as they are, even industry experience studies have
limitations as they provide no follow-up data about those whose application was declined
because the risk was thought to be too high, or about applicants who turned down
offers for cover at substandard rates.
21 Egger M et al. How important are comprehensive literature searches and the assessment of trial quality
in systematic reviews? Empirical study. Health Technology Assessment, 2003; 7: 1–76.
22 Royle P, Milne R. Literature searching for randomized controlled trials used in Cochrane reviews: rapid versus
exhaustive searches. International Journal of Technology Assessment and Health Care, 2003; 19: 591–603.
23 www.cebm.net/toolbox.asp.
24 Greenhalgh T. How to read a paper: Papers that summarise other papers
(systematic reviews and meta-analyses). British Medical Journal, 1997; 315: 672–5.
25 See Sub-section “Analysis and interpretation of results” below.

In addition, as with any systematic review of data, critical appraisal of the criteria that
determine what is included in any study used is essential 26. For example, a portfolio of
lives where the risk has been referred to a reinsurer may be biased because referrals by
insurance companies will typically be applications for high amounts, or more complex
cases, so that the mortality ratio may be higher than for all insureds with the same
impairment 27.
The personal experience of an underwriter or Chief Medical Officer has limited value,
as it may be subject to bias, which the use of systematic review is designed to reduce 28.
Examples of bias include a narrow and selected range of exposure, and recall bias where
the most memorable adverse experience associated with an impairment is inappropriately
generalised to all cases.
In response to these limitations, EBR has developed a hierarchy of evidence which acts
as a guide to the strength of the evidence for and against a specific treatment 29. Similar
to EBM, in general, randomised trials provide the highest level of evidence. As illustrated
in Figure 3.3, a similar prognosis hierarchy can be produced for the purposes of EBR,
with the strongest evidence coming from experience studies of groups, or cohorts, of
insured lives. Insurance-derived or clinical cohort studies are particularly useful as they
are planned and prospective with objective end-points – such as death or a well-
defined event – determined at the outset.
Figure 3.3 High

The hierarchy of EBR evidence relevance
̤̤ Justification paper based upon industry and clinical experience
̤̤ Systematic review and mortality analysis of well-conducted cohort studies
̤̤ Systematic review and mortality analysis of well-conducted case-control studies
̤̤ Analysis of a single large randomised control trial or observational study
̤̤ Opinion of re/insurer’s internal expert committee
̤̤ Opinion of re/insurer’s chief underwriter
̤̤ Wider market practice
̤̤ Opinion of re/insurers’s Chief Medical Officer
̤̤ Opinion of individual underwriter
Low
relevance
Evidence can be objective, subjective or a becomes increasingly subjective. Eventually,

mixture of the two. The use of broadly based decisions may need to be made on the basis of
insured-lives experience studies is the most limited evidence and a degree of judgement
robust source of evidence, although a critical by consensus may be required. Decisions may
review of inclusion criteria and analytical be strongly influenced by what the market will
methods is required. Moving down the accept and by the company’s risk philosophy
hierarchy, the amount of objective evidence and appetite (conservative or liberal).
available reduces, while decision making
26 Greenhalgh T. How to read a paper: Papers that summarise other papers (systematic reviews
and meta-analyses). British Medical Journal, 1997; 315: 672–5.
27 See also Section 3.3 for a likely real-life example of this type of confounding.
28 Savoie I et al. Beyond Medline: reducing bias through extended systematic review search.
International Journal of Technology Assessment and Health Care. 2003; 19: 168–78.
29 These published approaches have been reviewed by the US Preventive Service Task Force.

Finally, it should be noted that identifying the relevant studies can be a laborious
exercise. Search methodologies must not be too sensitive (so that a large number of
unhelpful studies are searched) or too specific (so that potentially useful studies are
not identified). Using abstracts for this process can be misleading, as these frequently
contain erroneous data 30.
Analysis and interpretation of results

The next step is for event rates amongst these cohorts to be compared with one
another, in order to produce either an absolute or a relative rate difference. This
is expressed either as a mortality ratio or, where disease or disability incidence is the
end point, a relative risk (see box for further information). These rate differences can
be used to quantify the risk differential between those with and without impairments.
Absolute rate differences versus relative risks

The additional mortality can be expressed as an absolute rate difference (or flat extra)
or as percentage of the baseline (mortality or relative risk ratio).
Absolute rate difference

If the mortality rate in those with disease x is 3 per 1 000 per year, and that in those
without the disease is 1 per 1 000 per year, then the excess death rate in those with
disease x is 2 per 1 000 per year.
Mortality ratio
If the mortality rate in those with disease x is 3 per 1 000 per year, and that in those
without the disease is 1 per 1 000 per year, then the mortality ratio is 3 (or 300 %).
The extra mortality is 200 %.
Reviewing the evidence and comparing event rates between groups can give rise to
a number of difficulties:
̤̤ Confounding effects may not be identified or included in the analysis. For example,
elevated blood pressure is a major influence on the adverse cardiovascular effects
associated with obesity31; a study which does not stratify by blood pressure may
overestimate the risk associated with obesity in individuals with normal blood
pressure.
̤̤ The data usually need to be manipulated to derive mortality or event rates. More
often, survival rather than mortality rates are published. As mortality is the basis
of life insurance rate calculations, this may need to be derived from published
survival data or survival curves.
̤̤ There may be limited stratification of the group with the impairment or risk factor.
Publications may divide continuous variables, such as cholesterol, into large groups
such as quintiles or quartiles, whereas for most forms of insurance only some 5–10 %
of applicants are regarded as substandard for insurance purposes.
30 Gøtzsche PC. Believability of relative risks and odds ratios in abstracts: cross sectional study.
British Medical Journal, 2006; 333: 231–4.
31 Asia Pacific Cohort Studies Collaboration, Body mass index and cardiovascular disease
in the Asia-Pacific Region: an overview of 33 cohorts involving 310 000 participants.
International Journal of Epidemiology, 2004; 33: 1–8.

̤̤ Studies are often heterogeneous and the results difficult to reconcile. Confidence
intervals may be wide. Judgement is often required even where objective inclusion
and exclusion criteria are used.
̤̤ Availability of data for rare impairments is often poor, or there is over-reliance on one
major dataset. Again, judgement may be required to provide a best estimate of the risk.
̤̤ The pattern of mortality (or disease/disability incidence) can vary over time, and the
study may not divide the overall period into individual timeframes (interval analysis)
so that the mortality trends over time can be determined. Many diseases, including
cancer or stroke, have high short-term mortality which may render an applicant
uninsurable during the early months or years after diagnosis. In many cases, however,
the additional mortality risk subsequently drops to a level that is insurable, although
usually at substandard rates.
Having been collected and analysed, the data must be transformed into suitable risk
estimates for insurance risk rating, with regard to the average mortality (or disease/
disability) risk within the standard lives pool. To facilitate this process, guidelines for
mortality analysis have been published in insurance medicine literature 32 and the
American Academy of Insurance Medicine has a mortality course that teaches methods
of mortality analysis. Other sources are available, covering critical illness and disability.
One of the challenges involved in translating data into ratings relates to risks that exist
as continuous variables – blood pressure or cholesterol, for example. For impairments
such as stroke or breast cancer, in determining whether the risk is substandard or within
the range of the standard risk group, the mortality rates of those in the standard risk
pool are compared against those presenting the impairment – a relatively uncomplicated
process for experienced practitioners assuming credible data is available. In the case
of continuous variables, however, there is no clearly defined value above which the risk
becomes excessive, making it difficult to determine where the cut-off between normal
and abnormal lies. For example, the threshold for the rating of such risks, for increased
blood pressure and cholesterol, is determined by a number of factors:
̤̤ the shape of the risk curve (for example, how much does the mortality or morbidity
risk increase as the blood pressure increases?);
̤̤ the distribution of the values for blood pressure or cholesterol amongst
applicants; and
̤̤ the distribution of mortality in the standard risk pool.
32 Pokorski R. Mortality methodology and analysis. Journal of Insurance Medicine, 1998; 20: 20–45.

Although the pricing is based upon the overall expected claims experience within the
standard risk pool, some applicants will present a lower-than-average mortality risk (for
example, due to a low normal blood pressure or low cholesterol) whereas others will
present a higher risk (for example, due to a high normal blood pressure or high level of
cholesterol). This is illustrated in Figure 3.4: the distribution is such that an additional
mortality risk of 25 % or even 50 % of the mean standard mortality risk can be included
in the standard risk pool. However, as covered in Chapter 1, cross-subsidisation within
the standard risk pool eventually ceases to be tenable because of competitive pressures,
unfairness to those who present a lower risk and because broadening the size of the
standard risk pool would increase the base price to a level that may exclude those less
able to pay.
Figure 3.4 18% Percentage of a hypothetical population of applicants

Distribution of mortality risk amongst Standard (priced mortality) Substandard Declined
applicants for life insurance 16%
14%
12%
10%
8%
6%
4%
2%
0%
Low Expected mortality rate High
Within the standard risk group (represented by paying the same, non-rated, base price (the
the shaded area) there is a range of mortality mean of which is represented by the down-
risks depending upon the level of mortality risk ward arrow) as those with a higher mortality
factors presented by those in the pool. For risk. The cut-off point between standard
example, lifestyles will vary – some people will and substandard depends upon the average
present very low levels of cardiovascular risk mortality within the standard group and the
factors. As a result, there is a degree of cross- pattern/shape of the mortality distribution.
subsidisation within the standard risk pool, The chart shows hypothetical data for illus
with those presenting a lower mortality risk trative purposes.

Peer review and adaptation of rating guidelines

When completed, the analyses are formalised in a systematic review paper with the risk
estimates translated into rating recommendations suitable for an underwriter to use.
At Swiss Re itself, the findings are peer-reviewed by others in the EBR team, and then
globally, before the ratings are accepted for inclusion in Life Guide. Using the example
of ratings for obesity, the following section provides an example of the process in action
at Swiss Re.
3.3 Rating for obesity: an example of evidence-based rating in action
Interest in build as a mortality risk factor for insurance dates back to 1903. Subsequent
analyses of insured lives datasets have shown that, the greater the departure from
average weight (depending on height), the higher the mortality. Particularly noteworthy
is the 1979 build study 33 which included more than 4.5 million insureds who were
followed up for up to 22 years. Subsequently to the 1979 study, height and weight
tables – which have been used by underwriters to assess risk – have been replaced
in the clinical literature by body mass index (BMI) as a single index of build. BMI is
measured by dividing the weight in kilograms by the height in metres squared. The index
is not without its critics, because as a measure of intra-abdominal fat (which is the
most important factor in the cardiovascular and cancer mortality risk associated with
obesity) it is somewhat crude. It is feasible that BMI may eventually be replaced
by waist circumference or the waist-to-hip ratio 34 but currently BMI remains the most
widely used measure of build in clinical practice.
The majority of clinical studies using BMI have shown that, for obese individuals, the all-
cause mortality risk increases in line with BMI. The most important study is the American
Cancer Study 35. This shows that, compared with a normal build (BMI between 22 and
24), increasing BMI is associated with an increased mortality risk. Figure 3.5 provides
a graphical summary of the mortality hazard ratios for males aged between 30 and 65,
reported in some of the most important clinical and insurance studies.
33 Build study 1979, published by the New York Society of Actuaries and the Association of Life
Insurance Medical Directors of America, 1980.
34 Yusuf S et al. Obesity and the risk of myocardial infarction in 27 000 participants from 52 countries:
a case-control study. Lancet, 2005; 366: 1640–9.
35 Calle E, Thun M, Petrelli J, Rodriguez C, Heath C. Body mass index and mortality in a prospective cohort
of US adults. New England Journal of Medicine, 1999; 341: 1097–105.

Figure 3.5 4.5 Mortality hazard ratio
Mortality hazard ratios by BMI adapted
from a variety of studies; males, age range 4.0
across the studies 30–65 years 3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0 16–18
19–21
22–24
25–27
28–30
31–33
34–36
37–39
40–42
43–45
BMI
Swiss Re Alameda County, fully adjusted
Peeters Calle smoker, no disease
1979 build/BP study Calle non-smoker, no disease
Durazo-Arvizu, no disease Bender
Sources in alphabetical order and key:

 1979 build/BP study – see footnote 33
 Alameda County, fully adjusted – Alameda Study: data derived from Allison D B et al. Annual
Deaths Attributable to Obesity in the United States. Journal of the American Medical Association,
1999; 282: 1530–8
 Bender – Bender R et al. Assessment of excess mortality in obesity. American Journal of
Epidemiology, 1998; 147: 42–8
 Calle non-smoker, no disease – see footnote 35
 Calle smoker, no disease – see footnote 35
 Durazo-Arvizu, no disease – Durazo-Arvizu R et al. Mortality and optimal body mass index in
a sample of the US population. American Journal of Epidemiology, 1998; 147: 739–49
 Peeters – see footnote 37
 Swiss Re – see footnote 36
Across these studies, there is a wide range meta-analysis have been developed to bring
of risk estimates. But all show that, as BMI studies such as these together to produce
increases, the mortality risk increases along a a composite estimate of risk, but these tools
J-shaped curve. Most of these studies adjust have a limited impact if the studies are
for confounding factors such as smoking fundamentally inconsistent. There is no single
or disease but the variables included in the method which will mathematically transform
adjustment are not consistent across the the hazard ratios in such a disparate group
studies. Mathematical approaches such as of studies into a single estimate of risk.

Using the results of studies such as these to produce a fair summary estimate of the
mortality hazard due to increasing obesity is not straightforward; it requires consensus
and judgement. The most noteworthy features in Figure 3.5 are the high hazard ratios
in the Swiss Re 36 study of reinsured male lives and the wide range of risk estimates
between the studies. However, in the interests of making the graph easy to read, the
95 % confidence limits around the hazard ratios are not depicted. If these were
included, the graph would show that there is a considerable overlap between all the
studies included. In fact, although the Swiss Re study experiences higher hazard ratios,
its 95 % confidence intervals overlap with the risk estimates of the clinical studies.
Overall, the best estimate of the risk appears to lie close to those of the American Cancer
Study and Peeters et al 37; other studies of portfolios of insured lives are also consistent
with the risk estimates in these clinical studies 38.
In common with the risk associated with many continuous risk factors, there is no well-
defined threshold at which the mortality risk becomes excessive for the standard pool;
the risk curves show an exponential increase in risk with increasing BMI, although
the risk attenuates if potential confounding factors such as blood pressure or glucose
intolerance are corrected for. At what point the risk becomes substandard is
determined by the shape of the risk curve, the average mortality of the standard risk
pool, and the distribution of BMI within the population of those applying for insurance.
If the aim is to include, say, 95 % of applicants in the standard risk pool then the
threshold for BMI at which substandard rates start will be set above the entire group’s
95th BMI percentile (for an example see Figure 3.6).
Figure 3.6 25% Distribution within the sample

Determining the cut-off for substandard lives
20%
15%
10%
5%
0%
16–17
18–19
20–21
22–23
24–25
26–27
28–29
30–31
32–33
34–35
36–37
38–39
≥40
BMI
Mortality hazard ratio 95th percentile
Swiss males 97.5th percentile
Source: Swiss Re (based on data provided by Fort Wayne and Zurich locations)
The distribution of BMI in Swiss reinsured The reference point for the hazard ratio
males aged 35–54 is compared with the (ie a hazard ratio of 1) is a BMI of 22–23
mortality hazard ratio in the same population. where the risk is lowest; the hazard ratio
The 95th and 97.5th percentiles are shown. for BMI 34–35 is 4.0).
36 Baldinger B et al. Cardiovascular risk factors, BMI and mortality in a cohort of Swiss males (1976–2001) with
high-sum-assured life insurance cover. Journal of Insurance Medicine, 2006; 38: 44–53 (data for men aged
35–54 provided by the authors).
37 Peeters A, Barendregt JJ, Willekens F, Mackenbach JP, Al Mamun A, Bonneux L; NEDCOM, the Netherlands
Epidemiology and Demography Compression of Morbidity Research Group. Obesity in adulthood and its
consequences for life expectancy: a life-table analysis. Annals of Internal Medicine, 2003; 38: 24–32.
38 Murali N and Ivanovic B, Body mass index and mortality in an insured population. Journal of Insurance
Medicine, 2001; 33: 321–8; Somerville KW, Chapter 18 – “Build”, in Brackenridge’s Medical Selection of Life
Risks, Brackenridge RDC, Croxson RS, Mackenzie BR eds, fifth edition, Palgrave Macmillan, London, 2006;
251–270.

So, how was the approach to obesity risk in Life Guide decided? As the current standard/
substandard BMI thresholds set the size of the standard risk group, and this is already
priced, it was decided to leave the cut-off points between standard and substandard
virtually unchanged. However, higher ratings were adopted for moderate and severe
obesity 39 as this is consistent with the clinical studies. Additionally, because Swiss Re
regards abdominal obesity as a better marker for mortality risk than BMI, a credit for a
normal waist circumference (if provided) was introduced into the rating guidelines
along with a credit for normal blood pressure; this has the effect of lowering the ratings
for mild obesity (BMI 30–34.9) if the waist circumference is normal. Neither waist
circumference nor the waist-to-hip ratios have been adopted as these are infrequently
measured, and there are limited long-term follow-up data upon which to base risk
estimates. Furthermore, due to improvements in the understanding of how obesity
contributes to cancer risk 40, Swiss Re was able to refine the build ratings for critical
illness cover.
In summary, underwriter’s decisions are impacted by the market and culture in which
the insurance is offered, the assumptions underlying the mortality and morbidity pricing
by actuaries, and the trade-off between affordability and the composition of the standard
lives pool.
Whilst competition between insurers acts as a liberalising influence, the use of evidence-
based rating guidelines is a strong basis for correctly charging for the additional risk
associated with impairments, helping to ensure that existing policyholders are not
disadvantaged and that the insurer’s claims experience is in line with expectations.
The use of evidence-based ratings is key for insurers

to be able to meet regulators’ needs to offer premiums
that are fair and justifiable.
39 Moderate obesity is a BMI of 35–39.9; severe or morbid obesity is a BMI≥40.

40 Calle E, Kaaks R. Overweight, obesity and cancer: epidemiological evidence and proposed mechanisms.
Nature Reviews, 2004; 4: 579–90.

© 2011 Swiss Re. All rights reserved.
Title: Fair risk assessment in life & health insurance
Authors: Christoph Nabholz, Kevin Somerville
Editing: Sarah Davies De Paola, David O’Sullivan,
Jon Lambert, Tim Dickenson
Managing Editor: Esther Baur
Graphic design and production:
Logistics/Media Production
The material and conclusions contained in this
publication are for information purposes only and the
authors offer no guarantee for the completeness of
its contents. The statements in this report may
provide current expectations of future events based
on ceratin assumptions. These statements involve
known and unknown risks, uncertainties and other
factors which are not exhaustive. The authors of this
report undertake no obligation to publicly revise
or update any statements, whether as a result of new
information, future events or otherwise, and in no
event shall Swiss Re Group or any of its entities be
liable for any damage and financial or consequential
loss arising in connection with the use of the
information relating to this publication.
Additional copies and an overview of all Swiss Re

publications can be downloaded from
www.swissre.com
Order no: 1503195_11_en
06/11, 1000 en
Swiss Reinsurance Company Ltd
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P.O. Box
8022 Zurich
Switzerland
Telephone +41 43 285 2121

Fax +41 43 285 2999
www.swissre.com

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Fair risk assessment

Impairments to the commercial freedom of insurers

1. The private insurance pricing and risk selection process 4

2. Risk selection and the regulatory environment 12

3. Evidence-based ratings and their application 23

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Private insurance contracts are based fundamentally on the commercial freedom to

Underwriters are increasingly facing constraints on access

Anti-discrimination legislation can present a concern

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Demonstrating that long-established risk selection

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In many markets, particularly in Continental Europe, a distinction must be made between

Compulsory social insurance schemes are commonly based on a system of community

1.1 Private insurance and the concept of pooling

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Private insurance operates at its most efficient when

1.2 Individual life underwriting

Table 1.1 Social Private Private

* Risk factors of the group as a whole are underwritten

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Information symmetry Pooling similar risks

Keep within Equity between

Maintain profitability Access to insurance

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The following example of anti-selection demonstrates how allowing applicants to not

Table 1.2 Actual claims over expected

Progress towards higher acceptance levels owes much to continuous improvements

﻿ Swiss Re Fair risk assessment in life & health insurance 7

Figure 1.2 100 Benchmark index

1.3 Medical information considered in the underwriting process

The underwriting process may also involve a medical examination by a paramedical

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APS – attending physician statement PM – paramedical exam

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1.4 Level of underwriting evidence

Consequently, short proposal forms (known as simplified underwriting) can be

The price for a standard risk may vary from insurer to

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Through various well-intended regulations and laws, underwriters are increasingly

The past three decades has seen a steady evolution of

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Table 2.1 Examples of grounds or attributes Examples of areas of activity

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For discrimination not to be unlawful, generally speaking an act or omission must be

Age Discrimination Act 2004 – Section 37, Australia

Superannuation and insurance

(a) the discrimination:

The anti-discrimination framework in the United Kingdom 4 is as follows:

14 Swiss Re Fair risk assessment in life & health insurance﻿

Laws can spread from one country to another; this is

Legislation against discrimination on the grounds of genetic information

The legislative process is accelerating in many markets

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Council of Europe: Convention on Human Rights and Biomedicine

Article 10 – Private life and right to information

Article 12 – Predictive genetic tests

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Family history data protection

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13 Medical Examination Act (1998) and its self-regulation articles: www.verzekeraars.nl.

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1. The private insurance pricing and risk selection process 4

2. Risk selection and the regulatory environment 12

3. Evidence-based ratings and their application 23

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3.1 Evidence-based medicine: a model for the evidence-based

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