Is a moratorium enough?

News that the Association of British Insurers (ABI) has agreed to refrain from asking its customers for genetic tests results has been greeted with open arms this week. Genetics regulators, patients and doctors alike have all breathed a sigh of relief that a five-year moratorium on the use of genetic tests in insurance is now in place.

Others, however, have sounded a note of caution. This is only a moratorium. Although it covers almost all of the industry, it is still just a voluntary code which could be ignored. Talking to the Sunday Times, Andrew Stronach of insurers Virgin Direct, said 'What we need is legislation forcing insurers to stick to the rules - and real powers to punish companies that unlawfully use genetic information'. So is a moratorium enough to keep the insurance industry in line?

A moratorium is, of course, less safe than a legislative ban. No-one ever got sent to court for contravening a moratorium. But moratoria aren't just based upon the idea of good will. Breaching one can often be detrimental to the guilty party, even if the punishment falls short of legal sanctions or financial penalties. In this instance, insurers breaching the moratorium run the risk of losing their membership of the ABI, an organisation which represents them and protects their interests in a number of different domains. And if the breach got out into the public domain, the press attention which would surely follow could only be bad news for the company concerned. In a competitive market, reputation counts.

Of course, some companies, particularly those not represented by the ABI, may fail to take the moratorium seriously. Given this possibility, perhaps the only way to protect prospective policy holders is to make them aware of the moratorium and their rights in relation to it. In the commercial world, a discerning customer is often the best way to guard against sharp practice on the part of the vendor.