The Australian Government has proposed a ban on life insurers using predictive genetic test results to assess applications, aiming to prevent discrimination and improve access to cover. Here’s what the ban means for insurers and individuals.
What Is Predictive Genetic Testing?
Predictive genetic tests identify gene variants associated with heritable disorders that may develop later in life. These disorders are not clinically detectable at the time of testing but could indicate future health risks.
Why the Ban?
Concerns have been raised about the potential for discrimination in life insurance underwriting based on adverse genetic test results. The Government’s proposal introduces a total ban on using predictive genetic tests in life insurance.
Life Insurance and Genetic Testing
Life insurance in Australia is individually underwritten and risk-rated, meaning premiums are based on the applicant’s unique risk factors. This often involves assessing:
- Family medical history.
- Personal health and lifestyle habits.
Once a life insurance policy is in place, it is guaranteed renewable. This means the insurer cannot change or cancel the cover as long as premiums are paid, even if the policyholder’s health deteriorates.
The 2019 Partial Moratorium
In 2019, Australia’s life insurance industry introduced a moratorium preventing the use of genetic test results for certain policies below specific coverage thresholds. However, this partial restriction did not eliminate the issue. For instance:
- A woman with a BRCA2 gene variant and no personal cancer history was denied life cover despite undergoing preventative surgery and regular monitoring.
The Government’s Response
To address these concerns, the Government has announced a total ban on using predictive genetic test results in life insurance underwriting. Key points include:
- The ban will be subject to a five-year review.
- It applies only to predictive genetic testing. Diagnostic tests confirming existing conditions based on symptoms are not covered.
What’s Next?
The Government has not yet introduced legislation for the ban or set an implementation date, leaving insurers and consumers awaiting further clarity.
A Global Perspective on Genetic Test Discrimination
Australia’s decision reflects a broader global discussion on the ethical use of genetic data in insurance:
- United Kingdom: Insurers cannot use predictive genetic test results unless they are favourable or disclosed voluntarily. Huntington’s disease is an exception for life cover exceeding £500,000.
- Canada: The Genetic Non-Discrimination Act prohibits insurers from requesting or using genetic test results, with exceptions for individuals voluntarily disclosing favourable outcomes.
- United States: The Genetic Information Nondiscrimination Act (GINA) prevents the use of genetic test results in health insurance and employment. However, life insurance is not covered federally. Florida is a notable exception, banning the use of predictive genetic test results in life insurance underwriting.
What Does This Mean for You?
The ban aims to make life insurance fairer and more accessible by removing a potential barrier to coverage for those who undergo predictive genetic testing. However, with no legislation yet in place, individuals should:
- Stay informed about changes to the law.
- Seek professional advice before undergoing genetic testing if planning to apply for life insurance.
We will keep you updated as the Government moves forward with these reforms and provide guidance on navigating the changes when they take effect.
