In order to explore the future of genetic testing, the Treasury has released a consultation paper. Although the industry has voluntarily agreed to a moratorium on genetic testing for the majority of the past five years, the paper highlights the importance of effective enforcement to instill consumer confidence in any new testing regime. It suggests that the choice of the most appropriate enforcement body may depend on the specific limitations implemented.

Two Proposed Regulatory Options

The consultation paper presents two potential options: assigning enforcement responsibilities to either the AHRC or ASIC. It is worth noting that a report commissioned by the government has previously recommended the use of the AHRC to enforce new obligations related to genetic testing in life insurance. The report recognizes the AHRC's experience in addressing discrimination claims within the insurance industry, resolving conflicts, and promoting understanding among individuals and stakeholders.

Alternatively, the paper suggests that ASIC could be responsible for enforcing genetic testing obligations within life insurance as part of its overall regulation of life insurers. The paper argues that ASIC's vast experience in regulating life insurers and deep understanding of their operations make it a suitable candidate. Under this approach, consumers would have the option of raising complaints to the Australian Financial Complaints Authority (AFCA).

Considered Alternatives

The consultation paper outlines three options for consideration:

  1. No Government intervention: Genetic testing in life insurance would continue to be governed by the Disability Discrimination Act 1992 and the Life Insurance Code of Practice, with no additional action taken by the Government.
  2. Total or partial prohibition: Legislation would be introduced to either entirely or partially prohibit the use of adverse genetic testing results by life insurers.
  3. Financial limitation: Legislation would establish a financial threshold below which insurers could not request or utilize adverse genetic testing results in their underwriting.

The Treasury has set the closing date for submissions on these proposals as 31st January next year.