26.6 The broad framework of privacy and anti-discrimination laws in Australia has been canvassed in Chapters 7 and 9. The exceptions in anti-discrimination legislation in relation to insurance recognise the underlying duty of an applicant, both at common law and under legislation, to disclose to the insurer all information that is known, or which reasonably ought to be known, to be relevant to the insurer—including genetic information. This section examines the legislative framework in further detail.
26.7 In addition to legislation, industry standards also play a role in regulating the collection and use of genetic information by the insurance industry. For example, as discussed in Chapter 25, the Investment and Financial Services Association (IFSA) has developed a Genetic Testing Policy to regulate the collection and use of genetic test results (but not family medical history). Under the policy, applicants must disclose any existing test results, in accordance with their common law and statutory duty of disclosure, and this information can be used in underwriting. However, the policy does impose some constraints. Life insurers cannot require applicants to undergo a genetic test, nor indirectly coerce applicants to take a genetic test by offering ‘preferred risk underwriting’ to those who have favourable genetic status.
26.8 As discussed in Chapter 9, Australia has anti-discrimination legislation at the federal, state and territory levels. Despite differences in detail, all legislation dealing with anti-discrimination embodies the same paradigm for identifying unlawful discrimination. For discrimination to be unlawful, an act or omission must be:
based on one of the grounds or attributes set out in the legislation, such as sex, race or disability;
fall within an area of activity set out in the legislation, such as employment or the provision of goods and services;
result in some harm or less favourable treatment, whether by direct or indirect discrimination; and
not fall within an exception, exemption or defence.
26.9 At the federal level, the Sex Discrimination Act 1984 (Cth) (SDA), the Racial Discrimination Act 1975 (Cth) (RDA) and the Disability Discrimination Act 1992 (Cth) (DDA) contain provisions relevant to discrimination in insurance. All three Acts make it unlawful to discriminate in the provision of goods and services. Subject to the other requirements identified above, it is generally unlawful to discriminate by refusing to provide a good or service, offering a good or service on altered terms or conditions, or by discriminating in the manner in which the good or service is provided. ‘Services’ are defined to include insurance services.
26.10 The DDA and SDA both contain exceptions relating to the provision of insurance, which allow insurers to discriminate in certain circumstances. Complaints of discrimination on the basis of genetic information in insurance are, however, most likely to be brought under the DDA and this chapter focuses on the provisions of that Act.
26.11 The RDA does not provide an exception for discrimination in insurance based on race. The RDA limits the information that insurers are permitted to use in underwriting applications for insurance, despite the actuarial relevance of the information. For example, insurers may not discriminate between applicants on the basis of race even though the life expectancy of indigenous Australians is known to be markedly lower than for the population at large.
State and territory anti-discrimination legislation
26.12 Each State and Territory in Australia has its own anti-discrimination regime and each Act contains its own insurance exception. The language of the insurance exceptions varies between jurisdictions but most of the provisions contain elements similar to those in s 46 of the DDA.
26.13 There may, however, be problems of overlap or conflict between federal laws, on the one hand, and state and territory laws, on the other. To address this problem, each federal anti-discrimination Act contains a provision expressly indicating that the federal Act is not to be taken to exclude or limit the operation of any state or territory law capable of operating concurrently with the federal Act. These provisions seek to prevent the paramount operation of federal law over state and territory law by reason of the Constitution. However, in relation to state laws such a provision can only cure one kind of constitutional inconsistency—it cannot cure a direct conflict between the operation of a state law and a federal law.
26.14 Following the decision of the High Court in Australian Mutual Provident v Goulden, the insurance provisions in state anti-discrimination legislation may be subject to challenge on the basis that they are inconsistent with federal legislation that regulates how life insurers may determine premiums by reference to actuarial advice and prudent insurance practice. In that case the High Court found that the provision prohibiting disability discrimination in the provision of goods and services in the Anti-Discrimination Act 1977 (NSW) was invalid to the extent that it was inconsistent with the Life Insurance Act 1945 (Cth). Because of the possibility that state legislation on this issue remains subject to challenge, future complaints of discrimination on the basis of genetic information in insurance are more likely to be brought under the DDA.
Disability Discrimination Act
26.15 Section 24 of the DDA provides as follows:
(1) It is unlawful for a person who, whether for payment or not, provides goods or services, or makes facilities available, to discriminate against another person on the ground of the other person’s disability or a disability of any of that other person’s associates:
(a) by refusing to provide the other person with those goods or services or to make those facilities available to the other person; or
(b) in the terms or conditions on which the first-mentioned person provides the other person with those goods or services or makes those facilities available to the other person; or
(c) in the manner in which the first-mentioned person provides the other person with those goods or services or makes those facilities available to the other person.
(2) This section does not render it unlawful to discriminate against a person on the ground of the person’s disability if the provision of the goods or services, or making facilities available, would impose unjustifiable hardship on the person who provides the goods or services or makes the facilities available.
26.16 As noted above, the insurance industry operates by making distinctions between risk classifications. To that end, insurers may offer the same insurance product to different individuals on different terms, or may refuse to offer some products to certain individuals. Section 46 of the DDA recognises the nature of mutually rated insurance and provides the following exception:
(1) This Part does not render it unlawful for a person to discriminate against another person, on the ground of the other person’s disability, by refusing to offer the other person:
(a) an annuity; or
(b) a life insurance policy; or
(c) a policy of insurance against accident or any other policy of insurance; or
(d) membership of a superannuation or provident fund; or
(e) membership of a superannuation or provident scheme;
(f) the discrimination:
(i) is based upon actuarial or statistical data on which it is reasonable for the first-mentioned person to rely; and
(ii) is reasonable having regard to the matter of the data and other relevant factors; or
(g) in a case where no such actuarial or statistical data is available and cannot reasonably be obtained—the discrimination is reasonable having regard to any other relevant factors.
26.17 The same exception applies both to the refusal to offer insurance (s 46(1)) and to the terms or conditions on which it is offered (s 46(2)).
26.18 According to the Guidelines for Providers of Insurance and Superannuation issued by HREOC pursuant to the DDA, actuarial or statistical data upon which insurers may reasonably rely include underwriting manuals, local data (for example, census statistics), relevant overseas studies, and relevant domestic and international insurance experience.
26.19 Where there are no relevant statistics or actuarial data available, and these cannot reasonably be obtained, insurers are required to show that discrimination is ‘reasonable’ based on other factors. Some genetic disorders are so rare that it might take decades to collect statistically reliable data. HREOC has suggested a number of factors that insurers may seek to rely on, including:
opinions from other professional groups;
actuarial advice or opinion;
relevant information about the individual seeking insurance; and
Carter v Boehm (1766) 3 Burr 1905, 1909 (Mansfield LJ).
Insurance Contracts Act 1984 (Cth) s 21. See also Australian Law Reform Commission, Review of the Marine Insurance Act 1909, Report 91 (2001), ALRC, Sydney Ch 10.
 Privacy regulation in the insurance context is discussed in detail in Ch 28.
 Investment and Financial Services Association, IFSA Standard 11.00 ‘Genetic Testing Policy’ (2002), IFSA.
 This element of the policy is the subject of an interim Australian Competition and Consumer Commission (ACCC) authorisation. See Ch 25.
Sex Discrimination Act 1984 (Cth) s 22; Racial Discrimination Act 1975 (Cth) s 13; Disability Discrimination Act 1992 (Cth) s 24 which are general provisions applying to the supply of goods and services, including insurance.
Sex Discrimination Act 1984 (Cth) s 4(1); Racial Discrimination Act 1975 (Cth) s 3(1); Disability Discrimination Act 1992 (Cth) s 4(1).
Disability Discrimination Act 1992 (Cth) s 46; Sex Discrimination Act 1984 (Cth) s 41.
Discrimination Act 1991 (ACT) s 28; Anti-Discrimination Act 1992 (NT) s 49; Anti-Discrimination Act 1977 (NSW) s 49Q; Anti-Discrimination Act 1991 (Qld) ss 74, 75; Equal Opportunity Act 1984 (SA) s 85; Anti-discrimination Act 1998 (Tas) s 44; Equal Opportunity Act 1995 (Vic) s 43; Equal Opportunity Act 1984 (WA) s 66T.
Sex Discrimination Act 1984 (Cth) s 10; Racial Discrimination Act 1975 (Cth) s 6A; Disability Discrimination Act 1992 (Cth) s 13; Human Rights and Equal Opportunity Commission Act 1986 (Cth) s 4.
 Section 109 of the Australian Constitution provides that where a law of a State is inconsistent with a law of the Commonwealth, the law of the Commonwealth shall prevail to the extent of the inconsistency. Section 122 grants the Commonwealth Parliament a general power to make laws for the government of the Territories.
 Such provisions can cure only ‘cover the field’ inconsistency. See University of Wollongong v Metwally (1984) 158 CLR 447.
Australian Mutual Provident Society v Goulden (1986) 160 CLR 330.
 This Act was repealed and replaced with the Life Insurance Act 1995 (Cth).
 For a detailed discussion of the High Court’s decision and its implications see M Otlowski, Implications of Genetic Testing for Australian Insurance Law and Practice (2001) Centre for Law and Genetics, Hobart, 19–21.
 Human Rights and Equal Opportunity Commission, Guidelines for Providers of Insurance and Superann-uation, <www.hreoc.gov.au/disability_rights/standards/Insurance/insurance_adv.html>, 19 February 2003.