The Association of British Insurers (ABI) has put a voluntary moratorium on using genetic tests for insurance policies worth up to £300,000, after coming under pressure from the Human Genetics Commission (HGC).
Baroness Helena Kennedy, head of the HGC, welcomed the move but said it had taken too long.
Norwich Union was singled out for criticism by Kennedy, for demanding that customers reveal the results of genetic tests for breast cancer.
She said the insurer had failed to abide by the rules of the Genetics and Insurance Committee (GAIC), set up in the mid-1990s to judge whether tests were reliable enough for insurance purposes.
Kennedy said: “Here you have one of the major players breaking the industry's self-imposed code of practice. This is one of the things that has quite outraged the commission.”
She pointed out that the genetics adviser to the ABI, Prof Sandy Raeburn, who gave Norwich Union the go-ahead to proceed, is also a member of the GAIC.
“I would have thought he would see his position as compromised,” she said.
In a letter to Kennedy, Mary Francis, director general of the ABI, agreed to extend a moratorium on the use of test results for life insurance linked to mortgage of up to £100,000. It will now cover all classes of insurance up to £300,000.
Francis said: “This will have the effect of excluding genetic test results from underwriting, other than for a small number of very high-value policies.”
The ABI has not yet confirmed how long the moratorium will be in place for.