The Government has recently announced that it will implement a total ban on the use of adverse predictive genetic test results in life insurance underwriting.
This announcement comes after the release of a Government consultation paper in November 2023 (Consultation Paper) and subsequent consultation period. The consultation was undertaken to address concerns that Australians were being discouraged from undertaking health related genetic testing out of fear that it could negatively affect their ability to obtain life insurance.
Life Insurance underwriting
Life insurance includes life, total and permanent disablement, trauma and income protection insurance. Life insurance is generally 'risk-rated', meaning insurers will individually assess a person's health to determine whether to provide life insurance, what limits to impose on the insurance cover and how much premium to charge. Practically speaking, this means the premium each person pays is proportionate to the risk that they will need to access life insurance during their life. Factors that an insurer may consider in the process of assessing risk (i.e. underwriting) may include a person's age, gender, medical history, occupation, family history and, until recently, genetic information.
What is 'predictive' genetic testing?
Genetic testing is an important tool used by medical practitioners (and researchers) to prevent, diagnose, treat and monitor a range of health conditions.
'Predictive' genetic testing is used to identify genetic markers that indicate a predisposition or heightened risk of developing certain health conditions in individuals who have not yet presented with any clinical symptoms. This knowledge can be used to promote regular screening and facilitate early detection of heritable or genetic based diseases – such as various forms of cancer – whilst they are still treatable.
For example, mutations in the 'BRCA1' gene significantly increases the risk of developing breast and ovarian cancer, especially for women. These mutations can be hereditary. Family members of someone with a faulty BRCA1 gene can undertake genetic testing to check whether they have any mutations in their BRCA1 gene. Discovering the presence of this genetic variance may lead to more regular screening and proactive management, potentially leading to earlier diagnosis, intervention and improved health outcomes. It could also affect pregnancy planning.
Why is this reform needed?
This reform is intended to prevent genetic discrimination and remove barriers to accessing important genetic testing, which has the potential to improve health outcomes for patients and increase participation in genetic research.
In the media release of 11 September 2024, the Assistant Treasurer and Minister for Financial Services, Stephen Jones MP states that “this change will give Australians the confidence to undertake genetic testing without fear it will impact their ability to access financial security through life insurance."
Previously, the Australian life insurance industry had itself introduced a partial moratorium on the requirement to disclose adverse genetic test results through the 'FSC Standard 11: Moratorium on Genetic Tests in Life Insurance' which came into force on 1 July 2019. However, under this moratorium life insurers could still request or use genetic test results if the amount of cover was over a certain monetary threshold. There were also concerns from stakeholders regarding the appropriateness of self-regulation by the industry. Unlike this moratorium, the proposed reform will be a 'total ban' (presumably meaning the ban will apply regardless of the amount of cover).
How will the total ban be implemented?
The Government has not yet disclosed when or how this ban will be implemented. However, the Consultation Paper suggests the reforms will be effected through legislative amendments to the Disability Discrimination Act 1992 (Cth). It also suggests these changes will follow the approach taken by Canada in its Genetic Non-Discrimination Act introduced in 2017, which prohibits any entity (including insurers) from requesting or using genetic test results. However, like Canada, the Australian Government has confirmed that individuals will still be allowed to voluntarily disclose favourable genetic test results to insurers. For example, an individual may disclose test results that show that they do not have a genetic variation which runs in their family to offset any negative impact that such family history may otherwise have on their life insurance policy.
It is unclear at this stage which body will be responsibility for regulating and enforcing the ban. The Consultation Paper proposes the Australian Human Rights Commission or the Australian Securities and Investments Commission as potential options.
What will the effects of the total ban be?
We anticipate that with time, this ban will lead to an increased uptake and acceptance of genetic testing by both medical practitioners and the Australian public, as well as increased participation in Australian based genetic research.
This change also comes amidst a growing uptake of direct to consumer genetic tests by individuals. Whilst such testing is predominantly used for ancestral or recreational purposes at present, it also has the potential to uncover and disclose health related genetic data to consumers.
As the use and capabilities of genetic testing are fast changing, the Government has confirmed that 'the total ban will be subject to a 5 yearly review to ensure there are no unintended consequences.'
The Council of Australian Life Insurers CEO Christine Cupitt has welcomed this announcement, stating that “Australia’s life insurers have 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.”
Our Life Sciences, Health and Insurance teams at MinterEllison can support you in understanding and preparing for these changes.
