Genetic testing for life insurance to be reviewed: Australian treasury

Despite the possibility that insurers may require genetic test results, policyholders may file reports on discrimination.

Australia's life insurance industry implemented a partial moratorium on disclosing genetic test results to encourage participation, however, concerns have emerged that this approach hampers engagement in crucial clinical genetic testing and medical research, the Treasury of Australia said.

This concept was introduced back in 2019.

The 2023 Australian Genetics & Life Insurance Moratorium: Monitoring the Effectiveness & Response (A-GLIMMER) report highlights stakeholder concerns. 

To address these, a regulatory review is proposed to examine the impact of insurers using genetic test results on testing and research. 

The consultation paper invites feedback on potential policy responses to strike a balance between underwriting needs and broader genetic testing goals.

Use of genetic testing results in life insurance underwriting

Life insurance, a risk-pooled mechanism, covers death, disability, trauma, and income loss. Unlike health insurance, it is risk-rated. 

Underwriting considers factors like medical history, age, and lifestyle. Genetic testing indicates health risks, benefiting medical research and individual health insights. 

Current moratorium effects discourage participation in clinical testing and research. Reviewing the regulatory framework is crucial.

Under the Insurance Contracts Act 1984, consumers must truthfully provide information to insurers, including genetic test results. 

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Discrimination exceptions exist in insurance under the Disability Discrimination Act 1992. 

Life insurers can request genetic test results, and consumers can report discrimination to the Australian Human Rights Commission.

The 2018 parliamentary report led to a moratorium in 2019. FSC Standard 11 sets limits for using genetic test results in life insurance. The moratorium's effectiveness, reviewed in 2022, showed varied impacts. 

Changes in October 2022 included removing the sunset clause, immunity for pre-moratorium tests, and its indefinite extension into the Life Insurance Code of Practice from July 2023.

The Council of Australian Life Insurers (CALI) replaced FSC in June 2022 and took over the Code of Practice in September 2023. 

Genetic testing prevalence has increased over the decade, as seen in Medicare data, reflecting advancements in genomic medicine. Further growth is expected with technological advances.

Genetic testing offers substantial public health benefits, but concerns arise regarding its impact on life insurance accessibility. The current moratorium may deter individuals from life-saving genetic testing and research participation due to fears of affecting insurance affordability. 

As genomic technologies advance, regulatory intervention may be necessary to balance affordable life insurance access and maximize genetic testing benefits.