Life insurance access key in genetic testing debate

The Actuaries Institute has signalled its support for federal legislation to regulate the use of genetic testing in relation to fair access to life insurance in its consultation paper submission.

The Institute’s submission outlined key considerations to “maximise the benefits of genetic testing while ensuring consumers can access affordable life insurance”, such as legislating financial limits to determine whether applicants would need to disclose their genetic test results to life insurers.

The paper recommended “aggregated financial limits of $1 million for Death cover, $1 million for TPD cover, $250,000 for Trauma cover and $8,000 per month for Disability Income Insurance cover per life insured across all policies held across individual and group life insurance”.

“In our view, this level would meet consumer needs and community expectations of access to a reasonable amount of life insurance to cover the financial impact of death or disability.”

“For genetic science to flourish, life insurance regulation must adapt to give consumers confidence that if they take a genetic test they can still access a reasonable amount of life insurance cover,” Actuary Jessica Chen, Chair of the Institute’s Genetics Working Group, said.

“To maintain a level of fairness across all customers, we advise Government to strengthen regulation by legislating a financial limit below which applicants need not disclose genetic test results, and at a level roughly twice that currently determined by industry through self-regulation.”

The Institute also acknowledged the rapid pace at which the genetic testing space is advancing, and the imperative on the industry and regulation to keep up to ensure consumers maintain the fair access to life insurance they are entitled to.

“Any legislative intervention must incorporate an agile mechanism for periodic review and the specific factors that would be considered,” the submission said.

“We believe Treasury is the appropriate body to assign responsibility for performing reviews at least every three years with flexibility to bring forward this review if warranted.

“The periodic review mechanism should give specific consideration to collecting better data to assess the effectiveness and impact of legislation.”

The Institute also said that the only prohibition to life insurers considering genetic test results should apply to predictive genetic testing only. It agrees that information from diagnostic genetic tests should be used in processing claims as “this preserves the key insurability principle that if a disease has manifested, whether known through a genetic test result or otherwise, this should be disclosed by the consumer”.