The life insurance industry has introduced a moratorium on the disclosure of genetic test results, which takes effect on 1 July.
The Financial Services Council has introduced a new standard, which is mandatory for all members. Under the standard, consumers will be able to get up to $500,000 of life cover without disclosing an adverse genetic test result.
Consumers have the right to disclose a favourable test result.
The FSC says all companies selling life insurance in Australia are members of the organisation.
FSC chief executive Sally Loane says the impact of the new standard is that anyone who wants to get a genetic test or take part in genomic research can do so, without having to share the results with an insurer.
Loane says: “We know the community benefits of genomic research, which has already led to better treatments for a number of illnesses, such as breast cancer.
“The moratorium is key to giving people the reassurance they need.”
The cover limits are $500,000 of lump sum death benefits, $500,000 of total and permanent disability cover, $200,000 of trauma cover and $4000 a month in total of any combination of income protection, salary continuance or business expenses.
The moratorium will be included in the Life Insurance Code of Practice. It will be in place until June 2024 and will be reviewed in 2022 with a view to extending the end date.
In a paper written for the Actuaries Institute in 2017, Jessica Chen and Alan Doble point out the “fundamental tension” between the desire for insurance providers to be inclusive and not discriminate between insurance applicants, and the sustainability of insurance companies’ business models in the presence of information asymmetry and potential anti-selection.
Under the FSC’s old standard an insurer could request the results of a genetic test. There were concerns in the scientific community that the use of genetic information by life insurers was limiting public participation in genetic research.