Genetic information
9.1 Genetic testing and genetic information can be predictive or diagnostic
in nature. Predictive genetic testing refers to the testing of a person who
does not present any signs or symptoms of a disease but whose family history places
them at a higher risk. Diagnostic genetic testing is used to confirm a person's diagnosis when a
disease is suspected based on the presentation of certain signs and symptoms.
9.2 While genetic information may indicate a possibility of an individual or
their family member contracting an inherited condition, such information is not
of itself a guarantee of this as other factors, such as lifestyle, may play a
role.
9.3 It is also not possible to predict from genetic test results the exact
time when a condition will be diagnosable, the rate in which a condition will
progress, how severe it will be or when a person will die. However, genetic information has the ability to potentially improve health
outcomes by allowing for early medical intervention and lifestyle changes. This potential has seen an investment by the Victorian, New South Wales and Queensland
Governments of approximately $25 million each into implementing genomics into clinical
healthcare.
9.4 Currently, predictive genetic testing is available for inherited
conditions such as some forms of cancer and heart disease as well as some neurological
conditions, such as Huntington's disease. Continual developments and technological advances mean that the number of
inherited conditions that predictive genetic testing is available for, as well
as the methods for such testing, is increasing. For example, the identification
of predisposition to inherited conditions is now available through direct-to-consumer
testing and whole genome sequencing.
9.5 As the use of genetic testing and the role of genomics in health care
increases, concerns have been raised around privacy and genetic discrimination. Genetic discrimination has been defined as 'the differential treatment of
asymptomatic individuals or their relatives on the basis of their actual or presumed
genetic characteristics'. At its core, genetic discrimination reflects the belief that, as a person has
no control over their genetic makeup, it would be unfair to discriminate against
them.
9.6 Genetic discrimination raises important questions about how predictive
genetic test results affect an individual and their family's ability to obtain
life insurance, as well as associated questions regarding research
participation and public health outcomes.
9.7 This chapter will focus on the use of predictive genetic information
(genetic information) by the life insurance industry and begins by looking at
developments in the use of genetic information by insurance companies in
several international jurisdictions. The use of genetic information by
insurance companies in Australia is then considered, followed by a discussion
of reform, including arguments for a ban on life insurers using genetic
information on one side, and continued self-regulation by the life insurance
industry on the other. The chapter concludes with the committee's views and
recommendations.
Genetic information and the life insurance industry in international
jurisdictions
9.8 In response to the rapid developments in the area of genetic testing and
research and concerns over genetic discrimination, several countries have
enacted legislation or voluntary agreements to restrict or fully ban the use of
genetic information by insurance companies.
United Nations Educational,
Scientific and Cultural Organization
9.9 The Universal Declaration on Human Genome and Human Rights was passed by
the United Nations Educational, Scientific and Cultural Organisation in 1997.
This declaration aims to protect against the use of genetic information in a
way that is contrary to human rights and dignity.
European Union
9.10 Genetic discrimination is prohibited in countries in the European Union
through the Council of Europe's Convention on Human Rights and Biomedicine. Legislation has also been enacted in European countries such as Belgium,
Denmark, Holland and Sweden that prohibits insurers using genetic information
when setting premium levels.
United Kingdom
9.11 An agreement in the form of a voluntary concordat (a concordat is an
agreement between parties relating to matters of mutual interests) and a
moratorium regarding the use of a customer's genetic information by life
insurers is in place in the United Kingdom.
9.12 The Concordat and Moratorium are agreed to by both the United Kingdom
Government and the Association of British Insurers. The Concordat is an
agreement to uphold the principle that insurance companies should, unless otherwise stated,
have access to relevant information in order to fairly price risk for the
benefit of all consumers. The Moratorium is a separate document that sits alongside the Concordant and
allows consumers to obtain significant levels of life insurance without having
to disclose the results of genetic testing.
9.13 The exception to this, as stated in the Moratorium, is a predictive
genetic test for Huntington's disease where life insurance is sought for over £500 000. Such an exception is only in place due to the United Kingdom Government seeking
advice from experts regarding an application from the Association of British
Insurers to use the genetic test results of Huntington's disease. Under the
Moratorium any such applications to use genetic information from the
Association of British Insurers must go through this process.
9.14 The Moratorium also prohibits the use of results from direct-to-consumer
tests as well predictive or diagnostic test results acquired as a part of
clinical research, such as through the 100 000 Genomes Project.
9.15 The 100 000 Genomes Project will sequence 100 000 genomes from around 70
000 people with the aim of creating a new genomic medicine service for the National
Health Service that will offer a diagnosis for patients, potentially identify
new and effective treatments, and enable new medical research.
9.16 Under the Moratorium, consumers and policyholders are allowed to use
genetic test results to demonstrate that they are not at risk of an inherited
disease.
9.17 While the agreement is in operation until November 2019, the UK
Government does not see a reason to introduce legislation regarding the use of
genetic information or family history. A review of the agreement was scheduled to take place in 2016. At the time of this report, the status of this review is unclear.
9.18 Table 6.1 below illustrates the positions taken in response to the use
of genetic information by insurers in European Union countries and the United
Kingdom. The table outlines whether a country has a regime of self-regulation
or not as well as:
- the stage at which insurers are limited or banned from using
genetic information;
- whether the limitation or ban is restricted to certain products
and/or to a financial limit of insurance coverage;
- whether a consumer can disclose their test results if they choose
to and whether an insurer can ask a consumer to undertake a genetic test; and
- whether the regulation of the use of genetic information by
insurers includes how an insurer can use a consumer's family history.
Table 6.1: European approaches to the use of genetic
information by life insurance companies
Country
|
Type of regulation/
self-26.2regulation
|
Policy stage
|
Are restrictions product specific?
|
Are there financial limits to regulations?
|
Can the consumer disclose a test by choice?
|
Can insurers ask consumers to take a test?
|
Is Family History included?
|
UK
|
Voluntary
agreement
|
Applications
|
Yes
|
Yes
|
Yes
|
No
|
No
|
Germany Switzerland
|
Law
|
All
|
Yes
|
EUR
300,000
CHF 400,000
|
No
|
No
|
No
|
Holland Sweden
|
Law
|
All
|
No
|
EUR
250,000
SEK
1,284,000
|
No
|
No
|
No
|
Belgium
|
Law
|
All
|
Yes
|
No
|
No
|
No
|
Yes
|
Portugal
|
Law
|
All
|
No
|
No
|
No
|
No
|
Yes
|
Ireland
|
Law
|
Applications
|
No
|
No
|
No
|
No
|
No
|
Austria Denmark France
|
Law
|
All
|
No
|
No
|
No
|
No
|
No
|
Source: Financial Services Council, Submission 26.2,
p. 8.
United States
9.19 The Genetic Information Non-Discrimination Act is an American
federal law providing protection for individuals from genetic discrimination in
relation to health insurance and employment. The Act prevents health insurers
from using genetic information in relation to decisions about eligibility,
coverage, underwriting or premium setting. This protection includes persons who
have tested positive for a predisposition to Huntington's disease prior to
presenting any symptoms. As a federal law, the Act sets the minimum level of protection that states in
the United States must provide. The Act is not retroactive, meaning it does not apply to genetic discrimination
prior to the Act's enactment.
Canada
9.20 On 4 May 2017, the Genetic Non-Discrimination Act was passed into
federal Canadian law. Under the Act insurers are prohibited from requesting
that a person undergo a genetic test or from requiring the disclosure of previous
or future genetic test results. The Act aims to protect predictive and
diagnostic genetic tests and information obtained in clinical and research
settings.
9.21 However, the Act does not prohibit an insurer's access to family
medical history. This means that a person will have to report their medical
condition if a family member applies for insurance but not their genetic test
results. The Act also does not indicate whether someone would have to inform an insurer
that they have had a genetic test. Under the Act, genetic discrimination may be
a criminal offence.
9.22 Prior to the enactment of the Act, the Canadian Institute of Actuaries
released a research paper to support its position in opposing the Act. The
paper noted that the Act will have a substantial impact on insurance companies
with premiums increasing from between 30 to 50 per cent.
9.23 The Canadian Life and Health Insurance Association believes that legislative
regulation is unnecessary and announced that it would include in its Industry
Code a commitment that insurers would not request or use genetic test
information for life insurance application up to $250 000. This would mean that about 85 per cent of applications would not require
disclosure of genetic information.
9.24 Unlike Australia where the Life Insurance Code of Practice is
mandatory for all members of the Financial Services Council (see the next
section for further details), the Canadian Industry Code and proposed commitments
is voluntary for members of the Canadian Life and Health Insurance Association.
9.25 The Office of the Privacy Commissioner in Canada published two reports
that considered the effect that the Act would have on the Canadian insurance
industry. Both reports found that there would be no significant impact on the industry or
insurance markets by banning the use of genetic information.
9.26 A primary reason for this finding was that severe single gene disorders certain
to cause premature death and requiring a high level of expensive coverage, such
as Huntington's disease, occur so rarely as to have minimal effect on the
insurance markets and the notion of pooled risk.
9.27 However, both the Canadian Office of the Privacy Commissioner and the
Library of the Canadian Parliament found that such a position may change as
technology continues to advance and the reliability and predictability of
genetic test results, as well as the number of conditions that can be
identified, increases.
9.28 The Library of the Canadian Parliament also found that it was difficult
to determine the prevalence of genetic discrimination in Canada and
internationally with different parties claiming 'discrimination is already a
problem' or 'that there is no evidence that [discrimination] is widespread' or
that 'there is not enough reliable information on which to base conclusive
statements'.
9.29 Currently, the constitutionality of the Act is being challenged, with
the argument made that the Act seeks to legislate matters that are in the
jurisdiction of Canadian provinces.
Genetic information and the life insurance industry in Australia
Background
9.30 As explained in chapter 8 of this report on access to medical
information by insurers, a consumer has a duty to disclose all relevant
information. Additionally, the Privacy Act 1988 and
the Disability Discrimination Act 1992 allow insurers in
Australia to use a consumer's genetic information where such information has
been obtained with consent and its use is both justifiable and reasonable.
9.31 Life insurers explained to the committee that the reason they require a
customer's genetic information is due to the principle of pooled risk. This
principle was examined in chapter 8 of this report on access to medical
information by insurers.
9.32 The 2003 report Essentially Yours: The Protection of Human Genetic
Information in Australia by the Australian Law Reform Commission and the
Australian Health Ethics Committee of the National Medical and Research Council
(ALRC report) considered, in response to the rapidly developing area of human
genetic information, how best to protect privacy, prevent unfair discrimination,
and ensure high standards are in place for research.
9.33 The ALRC report made note of how the area of genetics has produced two conflicting
yet equally powerful reactions. The first being public support for advancements
in medicine for better treatments and diagnosis. The second being concerns over
privacy and genetic discrimination and how the use of genetic information will
be regulated.
A key recommendation of the ALRC report was that a
standing committee, known as the Human Genetics Commission of Australia, be
established to provide high-level technical and strategic advice on emerging
issues in genetics to the Australian Government, industry and community.
9.35 The ALRC report also recommended that this advisory body be consulted in
the development of guidelines and policy for genetics. Other recommendations included, but were not limited to; the Human Genetics
Commission of Australia determining what types of genetic tests should be used
by insurers.
9.36 The government established the Human Genetics Commission of Australia
for a three year period from 2012–2015. In terms of recommendations relevant to
life insurance, the government noted that the majority of the recommendations
were directed at greater self-regulation of the life insurance industry.
Self-regulation and use of genetic
information by the life insurance industry
9.37 The Financial Services Council (FSC) is responsible for a self-regulatory
regime that consists of commitments presented in the Life Insurance Code of
Practice (Code) and a series of standards. The Code and standards are mandatory
for FSC members, including a number of life insurers, to adhere to.
9.38 Standard 11 relates to the use of genetic test results in life insurance
underwriting and Standard 16 relates to the use of family history information.
Standard 11 was first adopted by members of the IFA (the former name of the
FSC) in 1998 and was updated on 7 December 2016. Standard 16 was first approved
by the FSC Board on 1 December 2005 and was updated 7 December 2016. The
updates to both standards were done in consultation with Associate Professor
Kristin
Barlow-Stewart, Director of the Master of Genetic Counselling at The University
of Sydney.
9.39 The FSC submitted that they have been working with the geneticist
community, including geneticists both within and outside of the insurance
industry, since the early 1990s to develop standards that balanced the interest
of the individual consumer with a risk management focus required by insurers. The FSC believe that the standards promote best practice and allow customers to
be proactive in their health care management without fear of insurance
implications.
9.40 The FSC informed the committee that Standard 11 specifies that insurers
must not ask a consumer to undergo a genetic test. However, where an applicant has already undertaken a genetic test prior to the
application process, insurance companies do have access to the results of such
tests. Standard 11 also ensures that genetic test results are only used in assessing
the applicant's risk and not risk associated with their family members.
9.41 The FSC asserted that Standard 11 does not dissuade consumers from
participation in medical and scientific research. However, the disclosure of genetic information obtained through such studies is
required where the consumer is aware of such results, that is, where
participation in the research is not anonymous.
9.42 In addition, the FSC drew the committee's attention to the FSC's updated
Standard 11 of 7 December 2016 made in response to the rapid advancement in the
field of genetics. The update included new suggested wording to be used by life insurers when
asking insurance applicants about genetic testing. These words are:
10.11 Members should give consideration to the following
uniform wording when developing wording in personal statements with regard to
genetic tests
10.11.1 Have you ever had or are you considering having a
genetic test where you have received (or are currently awaiting) an individual
result?
9.43 Standard 11 explains that such words will provide insurance applicants
with clarity where they have participated in a medical research project but
have not received individual results.
9.44 However, at the public hearing on 1 December 2017, Mr Nick Kirwan,
Policy Manager at the FSC, acknowledged that the question contained in clause
10.11.1 was 'horrible'. To this end, he explained to the committee that the FSC
is prepared to commit to changing the question.
9.45 The FSC has a Genetic Testing Underwriting Database which commenced in
2000. This database records any underwriting decision made by a member of the FSC
involving genetic test results.
9.46 Under Standard 11, FSC members must provide the FSC with de-identified
data on applications involving genetic testing. FSC members must also agree to the data regarding genetic testing and insurance
applications being made publicly-available as a means to support research.
9.47 The committee was interested in understanding how many applications for
life insurance involve genetic information. Noting the requirements under
Standard 11 for FSC members to provide the FSC with de-identified data on
applications involving genetic testing, the committee asked the FSC for the
total number of applications for life insurance that involved genetic
information since the approval of Standard 11. Importantly, the committee was only
interested in a numerical total, not the raw data itself.
9.48 Nevertheless, the FSC were unable to provide the committee with the number
of applications involving genetic testing. Instead, the FSC informed the
committee that academics at the University of Sydney intended to publish their findings
based on the independent review of the database, and that the data is highly
sensitive and would require skilled analysis in order to be of any use.
9.49 The FSC also stated that to its knowledge, the number of Australians who
have had predictive genetic testing is low, although this number is likely to
increase significantly in response to continuing developments in the field of
genetics and the reduced costs of accessing genetic testing.
9.50 It is the FSC's understanding that where genetic information is used by
life insurers for underwriting decisions, it is common for the decision to be
made by a Chief Underwriter with the potential involvement of a Chief Medical
Officer or a specialist reinsurance company with access to geneticists and
other medical specialists. The Chief Medical Officer or specialist reinsurer may also consult with
external geneticists.
9.51 Life insurers submitted that, in line with FSC standards, they only ask
consumers whether they have had a genetic test. Insurers do not request consumers to undergo genetic testing or inform insurers
of results from anonymous research trials.
9.52 Life insurers such as TAL and Zurich also told the committee that circumstances
where genetic information has to be provided by the consumer is uncommon. For
example, Mr Brett Clark, Chief Executive Officer and Managing Director of TAL, stated
that out of 33 000 applications for retail insurance, only 750 applications contained
genetic information. Likewise, Mr Tim Bailey, Chief Executive Officer of Zurich, commented that it
would be extremely rare for genetic information to be disclosed at the time of
underwriting.
9.53 Furthermore, Ms Helen Troup, Managing Director of CommInsure, explained
that where genetic information is provided, the credibility of the information,
including whether it was analysed in an accredited testing facility, would be
considered prior to deciding how much credence to place on such information. Ms Troup noted that a pre-disposition to an illness would not in itself
preclude a person from having a successful claims outcome unless the condition
had been formally diagnosed.
9.54 While the FSC acknowledged that the debate over whether life insurers
should use genetic information was complex, the FSC was of the view that
self-regulation, through the Code and standards, was the most appropriate way
to manage the use of genetic information.
9.55 Moreover, the FSC believed that countries that have introduced
legislation in response to the issue of genetic information do not have the
same 'robust self-regulation mechanism' as Australia.
9.56 The FSC submitted that their regime of self-regulation also allows for
the industry to quickly respond to any developments in technology and research
relating to genetic testing, unlike legislation which could take years to
reflect any changes.
9.57 The FSC also informed the committee that placing limits on, or banning
the use of, genetic information will have consequences for consumers. One such
consequence is that a consumer will not be allowed to use a negative test
result to demonstrate to an insurer that they are not at risk of developing a
condition.
9.58 In terms of a moratorium type response to the use of genetic information,
Mr Kirwan explained that the FSC does not support such an approach as it
provides no certainty to consumers about what will happen with their genetic
test results or any future test results once the moratorium concludes.
9.59 Another consequence identified by the FSC and other insurers was the
potential for anti-selection and information asymmetry. This position was
examined in chapter 8 of this report on access to medical information by
insurers.
9.60 Life insurers such as AMP, CommInsure, MLC and Zurich supported the
FSC's position that the use of genetic information by insurers is a developing
and complex area that requires further debate.
9.61 MLC opposed any changes in legislation that would prohibit the use of
genetic information by life insurers and, like the FSC, noted that genetic test
results could benefit a customer by demonstrating to an insurer that they are
not at risk.
9.62 Likewise, AMP explained to the committee that, as the use of genetic
information by the industry in not common at the moment, a full discussion on
the appropriateness of a ban with stakeholders should take place before decisions
are made on how to respond to the issue.
Arguments for reform
9.63 In summary, the arguments presented to the committee for reform of how
life insurers use genetic information recommended that the use of such
information should ideally be banned in order to protect consumers against
genetic discrimination. In addition, concerns were raised about the FSC's current
regime of self-regulation, the accuracy and interpretation of genetic test
results, and how the use of genetic information by insurers effects participation
in research.
Concerns about self-regulation
9.64 Professor Margaret Otlowski, Dean of Law at the University of Tasmania
and Chair of the Australian Genetic Non-Discrimination Working Group (AGND
Working Group) called for legislation that would restrict or ideally ban the
use of genetic information by life insurers and a moratorium prohibiting the
use of genetic information until such legislation is enacted.
9.65 The AGND Working Group argued that a legislative response was necessary
due to the inherent conflicts of interest within a self-regulatory regime such
as the FSC's Code and Standards. The AGND Working Group argued that a conflict exists
between the benefits that accrue to the life insurer from obtaining as much
information as possible, and the consumer's loss of privacy and potential
exposure to genetic discrimination.
9.66 As noted earlier in this chapter, the update made to FSC Standard 11 in
December 2016 included a question about whether a consumer is considering
taking a genetic test. The AGND Working Group argued that the appropriateness
of this question was not subject to independent oversight, and saw it as allowing
insurers to obtain more information than is necessary.
9.67 While the FSC informed the committee that a geneticist was consulted in
the revising of Standard 11, the AGND Working Group claimed that the geneticist
community is not adequately represented in consultations undertaken by the
insurance industry.
9.68 The AGND Working Group also claimed that, due to self-regulation, it is
unclear whether there is a systematic use of expert geneticists when reviewing
and developing actuarial modelling to assess risk associated with predictable genetic
disease.
9.69 Both the Australian Medical Association (AMA) and the Royal Australian
College of General Practitioners (RACGP) agreed that the self-regulated way in
which insurers may or may not use genetic information obtained from a consumer
is problematic.
9.70 In relation to industry arguments that information is needed in order to
prevent anti-selection and increased premiums, the AGND Working Group stated
that no evidence had been provided by the life insurance industry to
substantiate these claims.
9.71 Furthermore, the AGND Working Group noted that the two reports
commissioned by the Office of the Privacy Commissioner in Canada found that
there would be no significant impact on the life insurance industry or
insurance markets as a result of a ban on life insurers using genetic
information.
Accuracy of genetic testing
9.72 Dr Paul Lacaze, the Head of Public Health Genomics at Monash University
and a founding member of the AGND Working Group, claimed that more research was
needed to understand genetics and its relationship to the future prediction of
disease risk, and that the information presently obtained from genetic testing
is not sufficiently robust to justify its use in actuarial modelling.
9.73 Dr Kate Stockhausen, Manager of Ethics at the AMA, also highlighted
issues around the accuracy of genetic results, particularly from direct to
consumer tests.
9.74 While genetic test results obtained in Australia are subject to oversight
and quality control, direct-to-consumer genetic tests are not regulated in
terms of how the results are interpreted or where the testing occurs.
9.75 Dr Lacaze advised the committee that direct-to-consumer test results are
based on risk calculations that are not scientifically supported. Additionally,
no genetic counselling is provided for such results and there is no medical
oversight of how the results are interpreted. Ms Jane Tiller, a Legal and Social Adviser in Public Health Genomics at Monash
University and a member of the AGND Working Group observed, however, that
despite the absence of these counselling and oversight processes, such test
results would still need to be disclosed to an insurer.
Adverse impact on potentially
life-saving genetic testing and participation in research
9.76 The committee was told that the ability of life insurers to use genetic
information is also adversely impacting the public's willingness to undergo
genetic testing due to fears that their access to appropriate insurance may be
compromised. According to the AGND Working Group, such fears may lead to an
additional burden on the public health system as people avoid being tested and
therefore cannot make the necessary lifestyle changes to be healthy.
9.77 Similarly, Dr Stockhausen told the committee that the AMA does not want a
situation arising where the actions, or potential actions, of a third party might
cause a person to avoid having genetic testing.
9.78 Ms Tiller told the committee that life insurers having access to genetic
test results negatively impact on the number of people participating in
research studies. Unlike the United Kingdom, where individuals can participate
and obtain their results from the public 100 000 genomes research project
without insurance implications, this is not currently possible in Australia.
9.79 Likewise, Dr Simon Longstaff AO, Executive Director of The Ethics
Centre, believed that people should not have to fear the insurance implications
of participating in research as research has an inherent community benefit.
9.80 Dr Lacaze also noted that a lack of participation in research may affect
the future competitiveness and progress of the Australian research industry as
well as the identification of emerging health issues. He provided evidence that
in one study over half of the individuals who choose not to participate
indicated that insurance concerns were the reason why.
9.81 Dr Longstaff explained to the committee that, at its core, insurance is
a means to respond to the uncertainty of life. Individuals pool their risk so
that when an adverse event occurs, the pool's resources can be used to respond
to the event.
9.82 In Dr Longstaff's view, the insurance industry's trend towards trying to
determine with greater precision the likely fate of an individual will, at some
point, become at odds with the purpose of insurance and the community benefit
it provides.
9.83 Dr Longstaff advised the committee that while the current situation
regarding life insurers' use of genetic information is appropriate, he would be
cautious about allowing insurers to 'push too far in terms of either demanding
testing or using the results of testing in order to risk-weight the
individual'.
Committee view
9.84 The committee is of the view that the evidence to the inquiry indicated
that, at present, genetic data is not presently sufficiently accurate or
reliable, particularly in relation to the increasingly popular direct to
consumer genetic testing, for a duty to disclose to be appropriate.
9.85 Evidence presented to the committee indicated that an individual's
genetic information can be used by insurers to charge a higher premium, exclude
insurance cover for certain conditions or deny insurance. This has occurred
even in instances where individuals have taken proactive steps to reduce their
likelihood of having a certain condition. However, it was never used to reduce
premiums.
9.86 While it may be difficult to ascertain the prevalence of genetic
discrimination, the continual developments in the area of genetics, as well as
costs reductions, means that the reliability, availability, and number of
genetic tests is increasing. Thus, the problem of genetic discrimination is
likely to become even more significant in the near future.
9.87 The committee notes the reasoning underlying the insurance industry's
need for genetic information. However, fears that adverse selection as a
consequence of consumers not having to disclose predictive genetic testing
results would make the life insurance market unsustainable may be overstated.
In addition, the Canadian Office of the Privacy Commissioner found that the
sustainability of the Canadian insurance industry is not likely to be affected
at this time by a ban on the use of genetic information. Life insurers did not
provide strong evidence to the contrary.
9.88 Though the committee considers the fears overstated, the committee
acknowledges adverse selection as a phenomenon in insurance. The committee's
primary concern in that regard is the potential for higher costs for consumers
if information asymmetry between insurers and insureds causes insurers to seek
to put up premiums to compensate. However, on balance, the committee believes
there is presently greater benefit to consumers in preventing a duty of
disclosure from arising in respect of predictive genetic tests for the reasons
referred to above.
9.89 Furthermore, the committee is concerned that the use or perceived use of
genetic information by life insurers has impacted on participation in public
health research projects and other forms of research. The committee is also
concerned that reduced participation by the public in research projects may compromise
Australia's competitiveness in international research.
9.90 The committee is highly concerned about evidence received that
individuals are not undertaking potentially life-saving genetic testing due to
fears of unfair treatment by life insurers.
9.91 The committee notes that the FSC were unable to provide the committee
with the exact number of its member's of life insurance applications that
involved genetic information since the approval of Standard 11.
9.92 Nevertheless, given that it appears that the use of genetic information
by life insurers remains low, and the understanding of genetic testing and its
predictive accuracy is developing, the committee is not persuaded that
legislation should be the first response.
9.93 As a first step, the committee considers that the FSC, in discussion
with the AGND Working Group, should update the Code and Standards 11 and 16 in
order to prohibit any life insurers from using the outcomes of predictive genetic
tests at least in the medium term. This should be done as a matter of some
urgency and take a form similar to the United Kingdom's Moratorium. However, similar
to the United Kingdom's Moratorium, this prohibition should not prevent a consumer
from being able to provide genetic information to a life insurer in order to
demonstrate that they are not at risk of developing an inherited condition. The
moratorium should be reviewed five years after being imposed, with the review
to take into account consumer impacts (for consumers generally, and for
consumers who have adverse genetic test results). Any moratorium arrangements
should apply indefinitely to predictive genetic test results obtained before
the lifting of the moratorium, if it is lifted, to avoid sharp jumps in
premiums for existing insureds.
9.94 The committee acknowledges the significant concerns raised during this
inquiry about the conflicts of interest inherent in the FSC's self-regulatory
regime. As set out in chapter 4, the committee supports the co-regulatory
approach outlined in the ASIC Enforcement Review Taskforce Position Paper,
particularly the requirements for industry codes to be registered. The
committee is firmly of the view that some of the concerns regarding
self-regulation would be alleviated if the government provided ASIC with the
appropriate enforcement powers to implement a co-regulatory approach.
9.95 In terms of the recommendations made in this chapter regarding the Code and
Standards 11 and 12, the committee is of the view that these safeguards would
be significantly strengthened by them becoming part of a registered
co-regulatory approach between ASIC and the FSC. The committee considers that a
co-regulatory approach would strike an appropriate balance between safeguarding
against the improper use of genetic information by the life insurance industry
while still allowing it to operate efficiently.
9.96 The committee further considers that the government should monitor the
FSC's adoption of the changes to the Code and Standard 11 and 16 as well as
whether life insurers are abiding by such changes. If life insurers fail to
implement and abide by the revised Code and standards, then the committee
suggests that the government implement legislation to ban the use of genetic
information by life insurers, except where the consumer provides genetic
information to a life insurer to demonstrate that they are not at risk of
developing a disease. In this instance, the government should closely consider
the approach taken by Canada.
9.97 The committee also suggests that the government should maintain a
watching brief on developments in the field of genetics and predictive genetic
testing in order to be in a position to consider whether legislation or another
form of regulation banning or limiting the use of genetic information is required
in light of future developments.
Recommendation 9.1
9.98 The committee recommends 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.
Recommendation 9.2
9.99 The committee recommends that the Financial Services Council make any
updates as necessary to Standard 16—Family History and the Life Insurance
Code of Practice to support the recommended changes to Standard 11—Genetic
Testing Policy as outlined in Recommendation 9.1.
Recommendation 9.3
9.100 The committee recommends that life insurers be banned from using
predictive genetic information while the Financial Services Council is updating
Standard 11—Genetic Testing Policy, Standard 16—Family History, and the Life Insurance
Code of Practice to align with Recommendation 9.1.
Recommendation 9.4
9.101 The committee recommends that if the Financial Services Council and life
insurers have adopted a moratorium on the use of predictive genetic information
as outlined in Recommendation 9.1, the Australian Government should continue to
monitor developments in genetics and predictive genetic testing to determine
whether legislation or another form of regulation banning or limiting the use
of predictive genetic information by the life insurance industry is required.