Mutuality and solidarity: assessing risks and sharing losses

Area of Science:

• Insurance Law
• Risk Management
• Bioethics

Background:

• Private insurance operates on the principle of mutuality, where individuals pay premiums based on their assessed risk.
• State social insurance is based on solidarity, characterized by comprehensive coverage and mandatory participation.
• The principle of utmost good faith (uberrima fides) is crucial in private insurance, necessitating complete disclosure of all known risks by both parties.

Purpose of the Study:

• To differentiate between the principles of mutuality in private insurance and solidarity in state social insurance.
• To examine the implications of the utmost good faith principle in private insurance, particularly concerning genetic information.
• To analyze the impact of legislation, such as the Disability Discrimination Act, on insurance underwriting practices.

Main Methods:

• Conceptual analysis of insurance principles (mutuality vs. solidarity).
• Examination of legal requirements, including the Disability Discrimination Act, and their impact on insurance practices.
• Discussion of the role and utility of genetic information in insurance risk assessment.

Main Results:

• Abandoning the utmost good faith principle could significantly harm private insurance.
• While some genetic information is valuable for underwriters, other genetic data may offer little practical use.
• The assessment of mortality rates is a key component in underwriting.

Conclusions:

• Maintaining utmost good faith is vital for the integrity of private insurance.
• A balanced approach is needed when considering the use of genetic information in insurance to avoid discrimination while ensuring accurate risk assessment.
• Legal frameworks must be carefully considered to ensure fair practices in disability and genetic risk assessment within the insurance sector.