Legislation creates exception on life insurer genetic testing

The Australian Securities and Investments Commission (ASIC) will have its workload increased via the Government’s new legislation banning the use of genetic information by life insurers.

The draft legislation, released yesterday, makes clear ASIC’s role in overseeing the new regime at the same time as pointing to the ability of people being able to access life insurance premium discounts if they volunteer access to their protected genetic information.

The legislation is the first major bill delivered under new Assistant Treasurer and Minister for Financial Services, Daniel Mulino.

The explanatory materials attaching to the Treasury Laws Amendment Bill 2025 Limited the use of genetic information by life insurer, has outlined that an exception to the ban is exists “where a life insured volunteers and consents to protected genetic information being used as part of underwriting ad where the use of that information favourably impacts the terms and conditions under which the life insurance may be offered”.

It said the ban will not apply where:

• The life insured or their agent, knowingly gave the protected genetic information to the insurer or underwriter; and
• The protected genetic information was not solicited by the insurer or underwriter; and
• The insurer or underwriter obtained the written consent of the life insured or their agent, for use of the protected genetic information in the underwriting; and
• The use of the protected genetic information did not, in relation to the life insurance contract decision, disadvantage the insured, any life insured or any third-party beneficiary under the contract.

It said that for the exception to apply, the provision of the protected genetic information to the insurer does not need to come directly from the insured, life insured or their agent.

“It can also be given by the treating medical practitioner of the life insured, if the treating medical practitioner has been authorised to do so by the life insured. This reflects the standard practice of a treating medical practitioner often transferring medical records to an insurer on behalf of their patient, instead of via their patient,” the explanatory materials said.

It said that it was expected that the written consent obtained by the insurer or the underwriter would be in a specific and self-contained document rather than being part of a proposal form.

Further, it said that it was expected that ASIC would need to approve such forms.