New Law Limits Genetic Test Results in Insurance

New Law Limits Genetic Test Results in Insurance

In a landmark decision, Australia has moved to ban insurers from using the results of genetic tests to deny coverage or hike premiums. This new legislation, which comes after years of debate and public concern, aims to protect Australians from discrimination based on their genetic predisposition to certain medical conditions.

The move is a significant step in regulating how insurers can access and use sensitive genetic data, reflecting broader global efforts to address the ethical concerns surrounding genetics and insurance.

A milestone for consumer protection

Genetic testing can assist with early diagnosis and treatment, and in some cases, it may even prevent the onset of disease. It can also assess an individual's risk of developing or passing on a genetic disorder, allowing for proactive decision-making. However, having a certain gene mutation does not guarantee a person will develop a disease. Human health is complex and there are a multitude of factors that can contribute to health outcomes, including lifestyle choices, environmental exposures, and access to healthcare.

The Government's decision follows increasing pressure from consumer advocates, medical professionals, and researchers, who warned that the misuse of genetic information by life insurers deter people from seeking potentially life-saving genetic testing, as well as from participating in genomic research.

By banning the use of genetic information, the government aims to address these concerns, ensuring that Australians can make informed health decisions without fear of financial repercussions. It further reinforces the Australian Government's dedication to supporting genomic research, with their investment of $66 million towards this field, along with $5.5 million allocated for newborn genetic disorder screening.

The legislative ban is in line with similar policies in other countries, including the UK, where a long-standing moratorium prevents insurers from using genetic test results in most circumstances, and Canada, which enforces protections against genetic discrimination in services, including insurance, through the Genetic Non-Discrimination Act (GNA).

How this change will impact the insurance industry

The Council of Australian Life Insurers has responded positively, supporting the change and stating they 'never wanted to do anything to discourage people from taking genetic tests and accessing the information they need to make informed choices about their health'¹. In 2019 the Financial Services Council, which previously regulated the life insurance sector, introduced a voluntary moratorium to prevent genetic discrimination. These guidelines prohibited insurers from using genetic test results for policies valued up to $500,000. While it was a step in the right direction, it wasn't legally binding. By formalising these protections at the national level, the government has reinforced the industry's efforts to handle genetic data responsibly, ensuring that all Australians can access life insurance without the risk of discrimination based on their genetic makeup.

The legislation applies to all risk-rated insurance, including life insurance, income protection, and total and permanent disability insurance. However, they will remain risk-rated, which means people will still have to disclose existing medical diagnoses and family history, as required by the insurer, but their decision to have a genetic test will be protected.

The new legislation will be reviewed every 5 years to ensure there are no unintended consequences. This is backed by the industry to ensure the new laws stay relevant to any genomic science advancements.

Your access to insurance remains protected

Coverforce fully support the new legislation and our clients' right to make informed health decisions without fear of financial repercussions. Learn more about PayCover Group Income Protection, a specialty life insurance product purchased by employers for their employees to protect their income when they can't work due to sickness or injury.

The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.

REFERENCES

1. https://www.abc.net.au/news/2024-09-10/life-insurers-banned-from-using-genetic-tests-to-deny-cover/104333828

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