Part G. Insurance

26. Genetic Discrimination in Insurance

26–1 As a general matter, there should be no departure from the fundamental principle underlying the market in voluntary, mutually rated insurance, namely, equality of information between the applicant and the insurer. However, where the underwriting of insurance involves the use of human genetic information, the insurance process should be subject to the Recommendations in this Report. (See Chapters 27 and 28).

26–2 The Human Genetics Commission of Australia, in consultation with peak industry bodies and regulators, should keep a watching brief on developments in the insurance industry in relation to the use of human genetic information, both in Australia and overseas, with a view to reviewing Australian insurance practices as the need arises.

27. Improving the Underwriting Process

27–1 The Human Genetics Commission of Australia (HGCA) should, as a matter of priority, establish procedures to assess and make recommendations on whether particular genetic tests should be used in underwriting mutually rated insurance, having regard to their scientific reliability, actuarial relevance and reasonableness.

27–2 The Investment and Financial Services Association (IFSA) and the Insurance Council of Australia (ICA) should develop mandatory policies for their members to ensure that, once the HGCA has made a recommendation in relation to the use of a particular genetic test in underwriting, that test is used only in conformity with the recommendation. As a transitional arrangement, insurers should be permitted to continue using genetic tests in underwriting in accordance with industry policies, until such time as the HGCA makes a recommendation in relation to those tests.

27–3 IFSA and the ICA should require their members to state, on relevant insurance application forms, that not all genetic test results have to be disclosed and that applicants may obtain further information about this from the insurer. In addition, IFSA and the ICA should require their members to provide, upon request, accurate information to applicants in relation to those genetic tests that the HGCA has recommended not be used in underwriting in accordance with Recommendation 27–1.

27–4 IFSA and the ICA, in consultation with the HGCA and the Institute of Act-uaries of Australia, should develop and publish policies for their members on the use of family medical history for underwriting mutually rated insurance.

27–5 The Commonwealth should amend the Insurance Contracts Act 1984 (Cth)to clarify the nature of the obligation of an insurer to provide written reasons for an unfavourable underwriting decision upon the request of an applicant. Where such a decision is based on genetic information, including family medical history, the insurer should be required to give reasons that are clear and meaningful and that explain the actuarial, statistical or other basis for the decision.

27–6 IFSA and the ICA should require their members to inform applicants of their statutory entitlement to reasons for an adverse underwriting decision based on genetic information, including family medical history. IFSA and the ICA should also develop mandatory policies for their members about appropriate mechanisms for providing sensitive information to applicants in response to a request for reasons.

27–7 IFSA and the ICA should develop mandatory policies for their members regarding the provision of reasons by an insurer to an applicant following an unfavourable underwriting decision based on family medical history. These policies should ensure that the reasons given are clear and meaningful and that they explain the actuarial, statistical or other basis for the decision.

27–8 The Commonwealth should amend the Disability Discrimination Act 1992 (Cth) and related legislation to clarify the nature of the information required to be disclosed by an insurer to the Human Rights and Equal Opportunity Commission in the course of resolving a complaint. The legislation should ensure that the complainant is entitled to access to the information so disclosed.

27–9 IFSA and the ICA should expand the jurisdiction of the Financial Industry Complaints Service Ltd (FICS) and Insurance Enquiries and Complaints Ltd (IEC) to allow those organisations to review underwriting decisions involving the use of genetic information, including family medical history. The amended rules should ensure that the complaint handling processes are:

• timely and efficient;
• carried out by suitably qualified individuals with a demonstrated understanding of insurance law and anti-discrimination law, underwriting practice, and clinical genetics;
• binding on the insurer but not on the complainant; and
• available in respect of a substantial majority of complaints, having regard to the monetary sum in question.

27–10 IFSA, the ICA and other relevant bodies should review their policies and practices in relation to training and education of members regarding the collection and use of genetic information in insurance.

27–11 The National Finance Industry Training Advisory Body, in consultation with IFSA, the ICA and the HGCA, should review relevant competency standards and the Financial Services Training Package to incorporate an appropriate level of competence regarding the collection and use of genetic information in insurance.

28. Insurance and Genetic Privacy

28–1 Insurers should review their consent forms, including medical authority forms, to ensure that they contain sufficient information about the collection, use and disclosure of genetic information to allow applicants to make an informed decision about whether to proceed with their application and consent to the collection of the information. In undertaking this review, insurers should consult with the Human Genetics Commission of Australia and the Office of the Federal Privacy Commissioner.

28–2 In reviewing consent and medical authority forms in accordance with Recommendation 28–1, insurers should ensure that consent to collect genetic information for the purpose of assessing an application for insurance is not bundled together with consent for other purposes. The provision of insurance should not be made conditional on the giving of consent to other, unrelated or secondary uses of the genetic information.

28–3 Insurers should seek a Public Interest Determination under the Privacy Act 1988 (Cth) in relation to the practice of collecting genetic information from applicants about their genetic relatives for use in underwriting insurance policies in relation to those applicants.