Genetic Testing Moratorium – Update

In the lead-up to this week’s 2019 FSC Life Insurance Conference, the Financial Services Council has confirmed its genetic testing moratorium policy will be implemented from 1 July 2019.

From this date, the moratorium on genetic test results will be a binding standard for all 22 life company members of the FSC, which the Council says will cover every individually assessed life insurance policy that can be taken out in Australia.

The industry doesn’t want consumers to have to wait for new protections like the moratorium…

The FSC reports the significant volume of stakeholder feedback in relation to changes to its Life Insurance Code of Practice has delayed its initial intention to release a revised Code by 1 July this year. FSC Senior Policy Manager, Nick Kirwan: “The industry doesn’t want consumers to have to wait for new protections like the moratorium, so we are introducing it from July as a Standard and looking at a range of other proposed Code changes to see what can be implemented via standard while the Code is rewritten.” 

The FSC confirmed the moratorium on genetic testing will enable to access up to $500,000 of life cover without having to disclose an adverse genetic test result, while other elements included in the moratorium include:

  • Consumers won’t be required to take a genetic test when applying for life insurance
  • Consumers won’t be required to disclose genetic tests taken as part of research if the consumer isn’t receiving the results
  • Consumers can choose to disclose a favourable genetic test result if they wish
  • Life insurers will take account of any protective treatment an applicant might have had

Under the moratorium, insurers will only be able to use relevant genetic tests if consumers apply for more than:

  • $500,000 life cover
  • $500,000 TPD cover
  • $200,000 trauma cover
  • $4,000 per month income protection cover

It says these limits are in line with equivalent insured benefit moratorium caps in Switzerland and Germany.

The Council advises this moratorium will be reviewed in 2022 to consider its objectives, the cover levels and the impact on other policyholders, and will be in place until at least 30 June 2024.

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