Insurer to Disclose Its Cancer Test : Regulation: The state persuades Transamerica Life to agree to give applicants a detailed explanation of the screening.
After a three-month investigation by the state Department of Insurance, Transamerica Occidental Life Co. has agreed to notify people who apply for coverage that they will be tested for cancer.
The Insurance Department said Transamerica has agreed to give every insurance applicant a brochure stating that the company will take blood samples and examine them for evidence of cancer. The brochure also says the cancer tests are “in an early stage of development” and do not always produce accurate results.
The department’s investigation resulted from a January story in The Times about Transamerica’s cancer-testing program. The story said applicants were asked to sign legal consent forms that did not state they were being tested for cancer. Applicants also were not told that the test results could be wrong.
Insurance regulators had faulted Transamerica for the language in its legal consent form, which ambiguously stated that applicants would be tested for “tumors.” Not all tumors are cancerous.
“We wanted them to disclose that the tests were for cancer, that the tests are new and how the test results are used,” said David Langenbacher, chief of the Insurance Department’s underwriting services bureau.
Transamerica, one of the nation’s largest life insurers, cooperated with the investigation, Langenbacher said.
James W. Dederer, Transamerica executive vice president and general counsel, said the agreement is unprecedented and might push the life insurance industry toward greater disclosure.
“I think (other companies) will sit up and take notice,” he said. “Right now, if you apply for insurance . . . you would have only a vague notion of what tests might be run and what would be done with the results.”
Critics of Transamerica’s testing program said they aren’t satisfied.
“It is not adequate to disclose that you are doing something inappropriate,” said Dr. Paul Goldfarb, a cancer specialist in San Diego and immediate past president of the American Cancer Society in California.
Goldfarb said the tests have not been approved by the U.S. Food and Drug Administration for cancer screening, a process requiring years of rigorous study. He said flaws in the tests are probably causing Transamerica to reject healthy people.
Transamerica says it is careful about how it uses test results, and rejects less than 1% of applicants for positive cancer tests.
Darry Sragow, deputy state insurance commissioner for consumer protection, said federal rules permit life insurance companies to use non-government-approved tests, although the FDA is considering a proposal to change that.
“Given the current state of the law, the best solution seems to be a large dose of disclosure . . . so consumers can make fully informed decisions,” Sragow said.
