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‘Regulatory intervention essential’ on genetic testing, AFCA says 

The Australian Financial Complaints Authority (AFCA) backs regulating life insurers’ use of genetic testing results, saying government intervention is needed for the sake of consumers.

Treasury is considering whether to introduce laws that stop insurers discriminating based on the results of people’s genetic test outcomes and has flagged a partial or total ban on using the tests as one of three options in a consultation.

“AFCA believes regulatory intervention is essential, and we would support a solution that promotes certainty, trust and fairness and ultimately provides positive consumer and community outcomes,” the authority says in a submission to Treasury.

“Access to independent and free complaint resolution is a key aspect of promoting these outcomes and in our view must be provided. Consumers should be able to make complaints to AFCA about the use of genetic testing by life insurers under an enhanced regime, as this would be a natural extension of our current jurisdiction.

“This approach would ensure there is a single [external dispute resolution] scheme for any life insurance complaint involving the use of genetic testing and would continue to provide consumers with a ‘one-stop shop’ for life insurance complaints.”

The Treasury consultation closed at the end of January. Two other options flagged are no government intervention, and setting a financial limit at which insurers cannot request or utilise adverse genetic test results in their underwriting. 

At present, life insurers have a self-regulated moratorium that prohibits the use of genetic tests below certain financial limits. Introduced in 2019, the partial moratorium was extended indefinitely as part of changes to the industry’s code of practice from July 1 last year.

The complaints authority says rules governing its remit will need to be changed if the Federal Government decides to legislate on the use of genetic test results.

“Any changes to the rules would be limited to ensuring AFCA can consider complaints about an allegation that the insurer used genetic testing results in life insurance underwriting assessments, inconsistent with its obligations under any updated legislation,” its submission says.

Click here for the AFCA submission.