The FSC’s Nick Kirwan considers the initial impact of the Moratorium on using genetic testing in Australia to assess life insurance applications ahead of a review of the Moratorium three years on from its introduction…
In 2019 Australian life insurers introduced a Moratorium on using genetic test results to assess life insurance applications. It allows people to take out life cover up to specified limits without having to disclose an adverse result of a previously taken genetic test. Implemented through a binding FSC Standard, it applies to all life insurers offering new policies in Australia.
The life insurance industry wants to make sure that every Australian can take part in genetic research, or take a genetic test individually for personal reasons, without fear that an adverse result would stop them taking out any life insurance.
Now, three years on, the FSC will conduct a review of the ongoing effectiveness of the Moratorium to decide whether the Moratorium’s policy settings need to be updated.
The review will consider its objectives, the specified cover limits, and the impact on other policyholders in the light of the latest advances in the field of genomics. It will also consider how to raise awareness of the Moratorium when people are considering taking part in genetic research or taking a genetic test for personal reasons. Consumer groups and experts in genetics will be invited to take part in the review, which will inform the terms on which the Moratorium will be extended from its current end date of 30 June 2024.
To help inform the review, since the start of 2021, the life insurance industry has been collecting data on genetic test results received as part of life insurance applications. The data is de-identified to protect the privacy of people taking out life insurance.
The FSC recently published some early findings from the genetic testing database. It shows that for all life insurance applications up to the Moratorium limit, disclosing a genetic test result had either no influence or a positive influence on the underwriting outcome. This is precisely what the Moratorium was intended to do (see: New Data Shows How the Genetics Moratorium for Life Insurance is Working).
Of course, we will never know how many adverse genetic test results were not disclosed because they were not required to be due to the Moratorium. However, in the six months to 30 June 2021, there were 9 cases where an adverse genetic test result was inadvertently disclosed to a life insurer when it did not need to be. In all 9 cases, the adverse result was disregarded by the life insurer and had no impact on the consumer because the application for cover was below the Moratorium limit.
…It means that anyone can participate in important genomic research, or take a genetic test for personal reasons, without the fear that it will stop them taking out some life insurance
We hope that these early findings give Australians confidence that the FSC’s Moratorium on genetic tests is working. It means that anyone can participate in important genomic research, or take a genetic test for personal reasons, without the fear that it will stop them taking out some life insurance to protect themselves and their family if that is what they choose to do.
Given the pace of advances in genomics, the FSC believes that a regularly reviewed Moratorium is the best way to support scientific research and genetic inclusion, while ensuring that there are no material cost implications for the wider community who have life insurance.
The FSC also plans to include the Moratorium in the next iteration of the FSC Life Insurance Code of Practice. This will mean it will have independent oversight by the Life Code Compliance Committee (LCCC) who will have the power to gather data and to sanction FSC life insurance members that do not comply.