The soon-to-be legislated ban preventing life insurers from using protected genetic information has been widely welcomed, but Sydney-based risk specialist adviser, Nicole Bendeich, says a critical gap in the draft rules could still leave consumers feeling vulnerable—ultimately undermining the very trust the reforms aim to build.
In an editorial published by Riskinfo, Bendeich says she supports the ban’s core intent of removing the long-standing fear that undertaking genetic testing could jeopardise access to life insurance. Under the draft, insurers will no longer be permitted to solicit or use protected genetic information in underwriting, with civil and criminal penalties attached. Applicants may still choose to provide favourable results, but only voluntarily, with written consent and never to their detriment (see: Genetic Testing Ban Grabbed the Headlines, But it’s Not the Whole Story).
the legislation …risks unintentionally recreating apprehension around genetic testing “by proxy”
Yet Bendeich argues the legislation leaves a key issue unresolved—and it risks unintentionally recreating apprehension around genetic testing “by proxy.” While applicants won’t be required to disclose protected genetic information, they must still disclose factual, non-genetic information such as intensive screening routines, preventive treatments, or other proactive health measures. If those preventive actions – often undertaken because of genetic concerns – trigger loadings or exclusions, consumers may still feel penalised for engaging with genetics, just indirectly.
“Getting this nuance right is critical to consumer confidence,” says Bendeich, who outlines a client case study to highlight the issue:
A healthy 40-year-old woman with a family history of breast cancer received a breast cancer exclusion on trauma cover despite a favourable genetic test and consistently clear preventive screening. Explanations from the insurer cited global reinsurer data and the limits of current genetic testing. Bendeich says this explanation feels generic in nature and difficult to reconcile with individual circumstances.
… advisers cannot build trust without transparent, specific explanations for underwriting decisions
She acknowledges the importance of robust risk management but argues that advisers cannot build trust without transparent, specific explanations for underwriting decisions—particularly when applicants are actively managing their health.
Bendeich proposes several steps to rebuild confidence, including:
- Clearer guidance on the interaction of genetics and family history
- Stronger protections around prevention-related disclosures
- Consistent communication of amended terms
- Setting up an industry-wide framework to track how favourable results and family history influence outcomes
While the draft ban is seen by many as a significant milestone, Bendeich emphasises that trust in life insurance “…isn’t created by law alone – it’s earned every time a person can see how a decision about them was made, and what could change it.”
Click here to read Nicole Bendeich’s full editorial piece on this issue.
