Thank you very much, Mr. Chair.
You may not have intended it, but the anti-selection that Bill S-201 would allow confers a benefit on those who test positive for certain genes. They know that they will be able to buy insurance priced to cover a risk much lower than their own risk. Suppose Bill S-201 is enacted as is, and then you learn that, say, your son-in-law carries a gene for a serious, often fatal, heart condition. Wouldn't you recommend that he buy life insurance, and a lot of it? If you answered yes, you are agreeing that anti-selection is real and that the law confers a benefit on those who test positive.
How big will the impact be? I created a model on behalf of the Canadian Institute of Actuaries, and I wrote two papers on it just to answer that very question. My model suggests that premiums for life insurance are likely to go up by 30% for males and 50% for females because of the prohibition in Bill S-201. That's a lot. That's what most of your constituents will be facing soon after the passing of Bill S-201. We believe that you didn't intend to do something that would result in a big jump in costs for your constituents. We don't think that it's in the public interest to do so.
If you're familiar with the paper written by Angus Macdonald, in 2011, the size of the impact may surprise you. I can explain why my numbers are appropriate for Canada, if you wish.
It's possible to amend the bill to avoid the unintended consequence of large increases in what Canadians will pay for insurance. Our proposed amendment is in our brief, and it's shown on the slides here. There's a table, as well, that gives the amounts that we're suggesting. The amendment sets a limit for the prohibition on requesting to see the results of a genetic test. Because the limit in our proposal is based on the average weekly earnings as published by StatsCan, it requires no recurring action from Parliament to keep it up to date. A company could use a genetic test if the amount is over the limit and if the mortality impact of the gene is found to be well supported by data. That's what's meant by “reasonable and bona fide grounds”. This chart shows the limits for the various types of insurance.
The amendment directly addresses two concerns. First, there is no restriction on buying insurance after a positive test up to the amount that the average Canadian is now buying. Second, by not applying the prohibition on larger amounts, we won't have the serious anti-selection that would result in large premiums for those who have not been tested or have tested negative.
By the way, even today, Canadians with a positive test can get a significant amount of life insurance. Group insurance is not restricted at all. Mortgage life insurance is not restricted, as opposed to what CMHC offers. There are insurance products sold with no medical questions at all; these aren't restricted. If an individual previously bought guaranteed insurability insurance, then more life insurance can be purchased with no medical evidence. Any insurance that's already owned cannot be terminated by the insurance company because of a positive test. So, fears about access to insurance are not well founded.
Note that the amendment that we will propose will not benefit the insurance companies. The companies are able to adjust their premium rates to protect their own profits.
I don't expect that their profits will, in the long run, be materially different if Bill S-201 is defeated, if it passes as is, or if it's amended as we propose. It's the public that will be hurt, but only if Bill S-201 passes as is. Our proposed amendment would protect.
Thank you, Mr. Chair.