Genetics and Insurance in Australia: Concerns around a Self-Regulated Industry

Abstract

Background: Regulating the use of genetic information in insurance is an issue of ongoing international debate. In Australia, providers of life and other mutually rated insurance products can request applicants to disclose all results from any genetic test. Insurers can then use this information to adjust premiums and make policy decisions. The Australian Financial Services Council (FSC; an industry body) developed and maintains the relevant industry standard, which was updated in late 2016. Aims/Objective: To review the 2016 FSC Standard in light of relevant research and determine the legitimacy of the Australian regulatory environment regarding use of genetic information by insurers. Results: We identified five concerns arising from the 2016 FSC Standard: (1) use of results obtained from research; (2) the requirement for an applicant to disclose whether they are “considering” a genetic test; (3) failure to account for genome sequencing and other technology developments; (4) limited evidence regarding adverse selection; and (5) the inappropriateness of industry self-regulation. Conclusion: Industry self-regulation of the use of genetic information by life insurers, combined with a lack of government oversight, is inappropriate and threatens to impede the progress of genomic medicine in Australia. At this critical time, Australia requires closer government oversight of the use of genetic information in insurance.

Australians’ views on personal genomic testing: focus group findings from the Genioz study

“…Those less keen on PGT cited concerns about negative impact of testing on privacy and insurance, leading to potential discrimination. In Australia, there have been calls recently for the government to provide closer oversight of the use of genetic and genomic information by the insurance industry, with concerns about their self-regulatory practices [ 39 ]. Insurers can request potential applicants of life insurance and other mutually rated products (but not health insurance) to disclose results from any genetic test, including results provided through personal genomic testing.…”

“…A few examples of discrimination have been reported previously and the authors argue that government oversight is needed to ensure public confidence and trust, especially if benefits of genomic research and genomic medicine are to be realized [ 32 ]. It is unclear to what extent users of PGT have encountered discriminatory practices by insurers in Australia, where there is no moratorium on the use of genetic information by insurers, unlike in the UK and several European countries [ 39 ].…”

Genetic testing and insurance in Australia

“…This highlights limitations inherent with a self-regulated industry, without government oversight, as shown by significant erosion of the consumer protections in the current iteration of the FSC genetic testing policy. 12 The stance currently taken in Australia is in marked contrast to the position taken by many comparable overseas jurisdictions, which have recognised the need for greater consumer protection. This includes the UK, where a moratorium on the use of genetic test information has been in effect since 2001, many European countries 13 and more recently Canada 14 , which have legislated to prohibit life insurers from using genetic test information.…”

Should Australia Ban the Use of Genetic Test Results in Life Insurance?

“…The Standard now contains several clauses that could be considered to conflict with the 2005 Government recommendations, including a recently added clause requiring applicants to disclose to insurers even a consideration of genetic testing, if requested. It is uncertain how insurers will use an affirmative response, but we consider even the inclusion of this request to be evidence of an erosion in consumer rights made possible by lack of regulatory oversight ( 18 ). Any model of industry self-regulation for the use of genetic information by life insurers, who are inherently motivated by commercial gain, represents a conflict of interest.…”

“…However, there is little evidence produced in Australia to support this claim. A report prepared for the Actuaries Institute 2017 Summit ( 20 ) asserts that a ban on genetic test results will result in adverse selection, but its claims are arguably based on a set of worst-case assumptions that are unlikely to be met ( 18 ). Independent modeling undertaken elsewhere, including in Canada prior to legislation being passed, indicates that a ban on the use of genetic test results would not have a significant effect on the operation of a reasonably sized life insurance market ( 21 – 23 ).…”