A three-year, government-funded research project involving genetics and health experts from Australia’s universities recently called for legislation to stop life insurance companies using genetic tests to discriminate between applicants. They say current industry regulations fail to protect consumers and deter people having “potentially life-saving genetic testing that could match them to tailored interventions and treatments.”
The project followed a 2018 Joint Parliamentary Committee Inquiry into the Life Insurance Industry that recommended Australia “urgently implement” a ban on the use of genetic test results in life insurance underwriting, similar to the UK’s.
In response to that inquiry, the Financial Services Council (FSC) – the life insurance industry’s peak body – introduced a partial, self-regulating ban in 2019.
However, the A-GLIMMER (Australian Genetics & Life Insurance Moratorium: Monitoring the Effectiveness and Response) project’s authors, say their findings demonstrate “that the FSC Moratorium – either in its current form or as included in the proposed 2023 Life Insurance Code of Conduct – is inadequate to address and prevent genetic discrimination in life insurance.”
The authors also said they found instances where life insurers failed to comply with their own industry moratorium, including asking insurance applicants about the results of their genetic testing. The names of these firms were not published in the final report.
Insurance Business raised these issues with the life insurance industry. The Council of Australian Life Insurers (CALI), the industry’s new peak body, responded to questions via email.
Concerning the allegations of breaches of the moratorium, Christine Cupitt (pictured above), CALI’s CEO was emphatic.
“The Council of Australian Life Insurers and our members take compliance with the Life Insurance Code of Practice (Life Code) very seriously,” she said. “We are not aware of any specific examples of breaches of the code in regard to genetic testing. Anyone who is concerned about a breach is encouraged to contact the LCCC.”
Cupitt said that the independent Life Code Compliance Committee (LCCC), administered by the Australian Financial Complaints Authority (AFCA), closely monitors industry conduct under the code.
“It has significant powers to impose sanctions on organisations subscribed to the Life Code, including imposing financial penalties against life insurers,” she said.
In response to the A-GLIMMER project’s call for legislation to stop life insurance companies using genetic tests to discriminate between applicants, Cupitt said CALI is “considering the findings.”
“We acknowledge the work undertaken by the A-GLIMMER project and are considering the findings and any further steps the industry could take to ensure the Genetic Testing Moratorium is achieving its objectives,” she said. “We certainly do not want to dissuade people from taking genetic tests or taking part in genetic research.”
CALI’s CEO also discussed the Genetic Testing Moratorium developed by the FSC that, as of a few weeks ago, is now part of the new Life Code governing the industry. She said, starting in October, CALI, which was formed last year, expects to transition governance of this Code from the FSC.
“All CALI members are subscribers to the Life Code, which sets out clear consumer protections including limits on how insurers can use genetic tests’ results,” said Cupitt.
The listed protections, she said, include:
However, if the insurance cover exceeds certain financial limits, she said, an insurer can ask a consumer for genetic test results but can only use them in accordance with the Disability Discrimination Act. Insurers can also take into account favourable genetic tests, said Cupitt, if the consumer chooses to disclose them.
“These protections ensure Australians can access a suitable level of life insurance, including through their superannuation, without being asked about the result of a previously taken genetic test,” she said.
Cupitt said these protections will not be impacted during the Life Code’s transition to CALI’s governance.
“We support Australians to make informed choices about their future so they can live in a healthy, confident and secure way over their lifetime,” she said. “As the leading voice of life insurance in Australia, we recognise that genetic testing can play an important role in empowering people to be better informed about their health and wellbeing.”
Are you a life insurance industry stakeholder? What do you think of the A-GLIMMER report’s call for legislation to ban discriminatory genetic testing by life insurers? Please tell us below
