'Regulating the Use of Genetic Information in the Life Insurance Industry' by Sara Golru in [2020] 7 UNSW Law Journal comments
The Australian life insurance industry has been the subject of extensive media and academic criticism due to their treatment of genetic information in the underwriting process. As the field of genetics advances, the potential for genetic discrimination also increases. The nature of this discrimination can be crudely summarised in the statement of a member of the Australian insurance industry, who informed a carrier of the BRCA1 gene mutation that ‘if you were a horse, we wouldn’t bet on you because we know you wouldn’t finish the race’. The insurer dismissed the relevance of the carrier’s significant efforts to reduce her risk by undergoing preventative surgery, in the form of a double mastectomy as well as the removal of her fallopian tubes and one of her ovaries.
Similarly, a life insurance applicant who tested positive for Lynch syndrome was consistently denied coverage, despite undergoing regular colonoscopies and preventative surgery. Federal Labor MP Matt Keogh noted that an oncologist informed him that he spent more time discussing the insurance ramifications of genetic tests with his patients than the health ramifications. These cases have prompted politicians, medical and legal professionals as well as academics to call for greater claims process transparency and government oversight of the life insurance industry.
Genetic test results cannot affect private health insurance in Australia, as it is community risk rated under the Private Health Insurance Act 2007 (Cth). Consequently, private health insurers are required to offer the same premiums to all applicants for equivalent policies and are prohibited from discriminating on the basis of health or other information. However, life insurance is mutually rated so insurers classify individuals according to their personal risk. This regime inevitably creates great potential for genetic discrimination, as genetic results can be used for underwriting life insurance in Australia, with little consumer transparency or government oversight. It is true that the use of genetic information has been relatively rare in Australian life insurance. However, it must also be acknowledged that genetic advancements are occurring at a rapid rate and genetic testing is becoming increasingly common. In order to harness the true potential of genomics in healthcare, we need to avoid impediments to the uptake of genetic testing and participation in genetic research.
From 2016 to 2018, the Australian Parliamentary Joint Committee on Corporations and Financial Services conducted an inquiry into the life insurance industry. Following 77 submissions and seven hearings, the Committee made a number of recommendations including: strengthening consumer protections and regulatory oversight of the industry; greater transparency of remuneration, commissions, payments and fees; appropriate access to personal medical and genetic information and; fairer claims handling practices. In particular, Recommendation 9.1 suggested that the Financial Services Council, in consultation with the Australian Genetic Non-Discrimination Working Group, assess the consumer impact of imposing a moratorium on life insurers using predictive genetic information, unless the consumer provides genetic information to a life insurer to demonstrate that they are not at risk of developing a disease.
As a result of this recommendation, the Financial Services Council (‘FSC’) imposed a moratorium on genetic tests in life insurance from 1 July 2019.13 Parts II and III of this article will review the current Australian and international legal frameworks governing the use of genetic information in life insurance. Part IV will highlight policy concerns and Part V will provide recommendations for reform.
