In the film Gattaca, genetic testing has created a near-future divided between humans with perfect genes and an underclass who have failed the tests. This week MPs took steps against insurance companies to ensure that the dark future pictured by Gattaca remains in the realms of science fiction.

The MPs called for a two-year moratorium on further genetic testing, amid expectations that the Department of Health is preparing to ban insurance companies from unfairly discriminating against people who "fail" genetic tests.

In a damning report, the select committee on science and technology said that:

• Insurers are giving genetic tests a predictive significance that cannot, at present, be justified;

• Insurers are keener on establishing the right to use tests rather than their relevance or reliability;

• It would cost little for insurers to ignore the results of tests currently available;

• Research into genetics will be hindered by fears about insurers' reactions;

• Insurers have become judge and jury on genetic tests.

Unlike many other countries which have banned insurers from asking about genetic tests, Britain's self-regulated insurance industry has adopted a hotch-potch approach to genetic testing.

In 1998, the Association of British Insurers identified tests for seven conditions which insurance companies could take into account when setting premiums. Individuals who tested positive could still obtain insurance, but with a higher premium and restricted level of cover.

But four of these tests have come under severe attack. The Royal Society told MPs that the selection of tests appeared "arbitrary" and this year the ABI admitted that four of the tests could no longer be considered reliable.

The Prudential, in its submission to MPs, said that the tests for familiar adenoma tous polyposis and hereditary motor and sensory neuropathy are irrelevant to insurers owing to their, typically, early onset; that for myotonic dystrophy it is, apparently, not sufficiently predictive, and multiple endochrine neoplasia has too wide an age of onset.

The MPs concluded that: "The ABI's decision that four of the tests it recommended insurers use for the past three years are no longer rel evant or reliable casts the gravest possible doubts on the validity of all the tests not explicitly approved by the [government's] genetics and insurance committee."

But despite criticism from many corners, the ABI and big insurers are clinging on to their rights to take into account the results of tests for Huntington's disease, and are seeking approval for genetic tests on the early onset of familial Alzheimer's disease and hereditary breast and ovarian cancer.

Mary Francis, director general of the ABI, said: "We cannot lightly ignore information that tells us that someone applying for insurance is at significantly higher risk than the majority of policyholders.

"Applicants are normally charged according to the risk they bring to the pool of people insured - for instance, because of their age or their medical history."

But the Alzheimer's Society, which has long campaigned against the use by insurers of genetic tests, called the MPs' report a "strike against discrimination" and urged the government to act swiftly to enforce a moratorium on tests.

Harry Cayton, the society's chief executive, said: "This report endorses a long-running Alzheimer's Society campaign against the use of genetic information by the insurance industry.

"I particularly welcome the concluding statement of the report, which states that for government and for our soci ety the choice is clear - expose people with conditions such as Alzheimer's disease to further stigma and discrimination or restrict access to genetic information by insurers.

"The industry case is based on bad science. They have continually made the spurious claim that they will be commercially damaged if prevented from using the results of genetic tests. This is untrue.

"I hope that the insurance industry and the government will act on these recommendations swiftly and that people will no longer be deterred from seeking genetic tests or from volunteering to take part in medical and scientific research for fear of future discrimination."

A curious fact emerging from the committee's report was the tiny volume of genetic testing. For example, Prudential dealt with seven applications involving genetic test data in 2000; Norwich Union, 50 out of 150,000 applicants for insurance in 2000; and the CIS only 14 out of 460,000 in three years.

Tests they want and ones they dropped

1. Huntington's disease: Test approved

2. Early onset familial Alzheimer's disease : Pending approval

3. Hereditary breast and ovarian cancer: Pending approval

4. Familiar adenomatous polyposis (may lead to colon cancer) : Abandoned

5. Hereditary motor and sensory neuropathy : Abandoned

6. Myotonic dystrophy (form of muscle weakness): Abandoned

7. Multiple endochrine neoplasia (disease of endochrine glands which can lead to kidney stones and stomach ulceration): Abandoned