Education and training

27.133 A number of submissions to the Inquiry expressed concern that participants in the insurance industry, and particularly those providing advice directly to applicants, such as agents and brokers, did not have an adequate understanding of genetic information and its implications for insurance. The Centre for Law and Genetics submitted that:

Anecdotally one hears accounts which suggest that the information available to agents and brokers on this subject may be less than adequate, or even if adequate, is not well understood by the agents and brokers, and that this, in turn, is reflected in the quality and accuracy of the information that they are able to provide. Indeed, it has been suggested that advice given by agents and brokers at the coalface may inappropriately deter individuals who have obtained unfavourable genetic test results or who have a family history of genetic disease from even applying for insurance, on the mistaken belief that their application will not be accepted.^[95]

27.134 The Institute of Actuaries of Australia submitted that education is an important consideration for those who work with genetic information. However, the Institute also noted that the degree of understanding and training required depends on the context:

We see a strong need for all people who are going to be dealing with genetics in their day to day work to understand what they are seeing. Sometimes this will require them to undertake detailed continuing professional education on genetics. This will apply, for example, to members of the medical profession … or to underwriters and actuaries who are making assessment decisions on applications for life insurance policies … In other cases, it will be enough to obtain a broad understanding, provided that the persons concerned know their limitations and seek the help of experts when they reach the boundaries of their own knowledge. This is likely to be the case in the employment field … or for insurance agents and brokers.^[96]

27.135 The HGSA expressed concern about the specificity of advice that agents and brokers might be required to give:

The HGSA believes, given the sensitivity of genetic information and the complexity of interpreting it, that agents and brokers should NOT offer specific advice about the implications of genetic testing. They must be able to offer genericadvice about the implications for insurance of having, or not having, a genetic test and where to get further information about genetic testing such as through a medical practitioner.^[97]

Industry education

27.136 Under the FSRA all AFS licence holders are required to:

• maintain the competence to provide the financial services covered by the AFS licence; and
• ensure that their representatives are adequately trained and are competent to provide the financial services covered by the AFS licence.^[98]

27.137 ASIC Policy Statement 146 Licensing: Training of Financial Product Advisers (PS 146) sets out minimum training standards for those who provide financial product advice to retail clients.^[99]IFSA summarised the application of PS 146 to insurers as follows:

IFSA would like to note that under new licensing requirements, holders of the AFS licence have obligations to ensure their representatives (including employees and authorized representatives) are adequately trained and competent to provide financial services on their behalf. In particular, ASIC’s Policy Statement 146 [PS 146] contains minimum training standards for representatives who provide financial product advice to retail clients. For advisers in insurance products, ASIC set outs in Appendix A2.6 of [PS 146] the core insurance knowledge and specialist knowledge requirements for all categories of insurance (general, life and broking).^[100]

27.138 The National Finance Industry Training Advisory Body (NFITAB) was established to act in an advisory and consultative role to assist in improving vocational education and training within the Australian financial services sector. Working with industry and government, NFITAB develops national competency standards, learning strategies and resources, assessment instruments and industry seminars. In particular, NFITAB works with industry to ensure that competency standards comply with PS 146. Standards are defined by industry, nationally recognised by the Australian National Training Authority (ANTA) and form the basis of training for the industry. NFITAB also develops and regularly updates the Financial Services Training Package based on the relevant competency standards.^[101]

27.139 ASIC maintains a Training Register, administered by NFITAB on ASIC’s behalf, which lists training courses that have been approved by ASIC authorised assessors as complying with PS 146. In order to be accredited with ASIC, training courses must supply evidence that they have aligned the course to the Financial Services Training Package using the relevant competency standards.

27.140 A number of training providers are involved in delivering accredited training courses to industry participants, including the Financial Planning Association (FPA), the Association of Financial Advisers (AFA), the National Insurance Brokers Association of Australia (NIBA) and the Australian and New Zealand Institute of Insurance and Finance. IFSA noted, for example, that:

The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) has launched its new Diploma of Financial Services (Life Insurance Stream) for 2003 … To assist members with their professional development, the ANZIIF will also be establishing an insurance medicine interest group. Through this group the latest medical knowledge will be made available to insurance professionals and assist the insurance industry in dealing with medicine related matters such as genetics.^[102]

27.141 IFSA also noted that under its Genetic Testing Policy:

Members must provide their employees and Authorised Representatives who represent them with sufficient information and training so that those employees and Authorised Representatives can reasonably be expected to understand the content and meaning of this Standard so far as it relates to their particular jobs and responsibilities.

Members’ Authorised Representatives must be aware of the need to seek specialist advice before responding to applicants’ questions, as the types of genetic test and their potential impact on the applicant differ enormously.^[103]

Community education

Unfortunately, there is a significant lack of public understanding on all matters genetic, whether GM food or cloning or testing. The mechanics of insurance are also not at all well understood, and when the two topics are linked in the same story, all too frequently the result is heat and no light.^[104]

27.142 IFSA and the Institute of Actuaries of Australia both agreed that there was a need to provide more community education about genetics and insurance. The Institute drew attention to its paper, Genetics in Society 2001, prepared by its workgroup on genetics as a community service.^[105] IFSA drew the following conclusions from a commissioned survey on consumer attitudes to genetic testing and life insurance:

Life insurance is a relatively low involvement product, even for those who have voluntary cover. It is not something that occupies consumers’ minds at times other than the time of consideration / purchase. The result of this is a low level of awareness and understanding of life insurance products, and more generally, of the operation of life insurance companies …

The industry believes it is important to continue its efforts to provide better education on insurance matters to the community at large …

The research indicates that community attitudes are malleable and that there is a need for communication and education not only by the insurers but also by the government and the wider medical community, and to be effective some of that communication should be done jointly.^[106]

Submissions and consultations

27.143 The majority of submissions dealing with this matter expressed general support for enhanced training and education, at both the industry and community levels. However, several submissions expressed the view that, due to the complex nature of genetic information, it may be unduly onerous to expect insurance agents and brokers to keep fully abreast of relevant developments.^[107] It was suggested that

one possible measure to overcome this difficulty would be the appointment of specialist advisors … who can be contacted as required by the agents and brokers, or even by the applicants themselves, when they have queries regarding the implications of genetic testing on insurance.^[108]

27.144 The Anti-Discrimination Board of NSW suggested that the HGCA, in conjunction with the insurance industry, undertake educational activities for agents, brokers and other significant participants in the insurance industry.

27.145 The Institute of Actuaries of Australia expressed the view that

there are adequate rules already in place to ensure that agents and brokers have the necessary knowledge on matters relating to the sales process. This includes knowledge on the correct completion of application forms to meet existing legal requirements for full disclosure of all information relevant to the risk the applicant is asking the insurance company to assume.^[109]

27.146 The Institute went on to note that it may be timely to consider this issue as ASIC is currently reviewing training and accreditation rules under the FSRA.

27.147 In consultations with the Inquiry, Deen Sanders, National Project Manager at NFITAB, noted that NFITAB is also in the process of reviewing and further developing the competency standards and Training Package discussed above. He indicated that NFITAB, in consultation with industry and the HGCA, could ensure that the competency standards and Training Package incorporate an appropriate level of competence in the use of genetic information in insurance. He also indicated that NFITAB is in the process of developing a community education project on financial services and that it would be possible to include information on the use of genetic information in insurance.^[110] ASIC could have regard to these amended competency standards in assessing whether a training provider is to be listed as a Registered Training Provider under PS 146.

27.148 The Australian Underwriters and Claims Association expressed the view that, as well as building in appropriate modules to existing training programs delivering PS 146 qualifications, industry should also conduct targeted seminars and conferences.

27.149 IFSA indicated its willingness to

work with the HGCA and other relevant parties to further develop appropriate programs that take into account the legal/licensing requirements regarding education and training that flow from the Financial Services Reform Act.^[111]

Inquiry’s views

27.150 The Inquiry considers that education and training about the nature and use of genetic information in insurance are vital, both for the insurance industry and the broader community. Community and professional education, and the ready availability of information when needed, can minimise misunderstanding of, and over reaction to, genetic information. The Inquiry recognises that the insurance industry is already active in this area, but there is still work to be done.

27.151 In Chapter 5, the Inquiry recommended that the HGCA assist with the development of community and professional education about human genetics. The establishment of the HGCA will provide an opportunity for a heightened focus on industry and community awareness of the wider issues associated with the use of human genetic information in insurance. The HGCA should also have a role in working with industry in relation to education and training.

27.152 However, responsibility for the training and education of industry representatives falls primarily on the industry itself. The Inquiry proposes an increased focus on training and education of industry members and their representatives, including agents and brokers, in relation to the collection and use of genetic information in insurance. This focus should extend to continuing professional education. The Inquiry recommends that peak bodies review their policies and practices in this regard.

27.153 In addition, the Inquiry recommends that NFITAB, in consultation with industry and the HGCA, ensure that the Financial Services Training Package and competency standards incorporate an appropriate level of competence in the use of genetic information in insurance.