An Actuarial View: Designing the Right Ban on the Use of Genetic Tests in Life Insurance

In one of his final acts before he retires for parliament, the Assistant Treasurer and Minister for Financial Services, the Hon Stephen Jones MP, is pressing ahead with the Government’s commitment to legislate a full ban on the use of genetic tests in life insurance underwriting in Australia.

This follows a year-long review conducted by the Department of Treasury on the current self-regulatory approach governing the use of genetic tests in life insurance, which culminated in the Australian Government’s September 2024 decision.

In the media release accompanying his decision, the Minister confirmed the Government’s intention to

“end the ability to discriminate based on adverse predictive genetic test results by banning their use in life insurance underwriting.”

As made clear in this statement, this policy would aim to ensure that no Australian is discouraged from undertaking potentially life-saving genetic testing out of fear it might impact their ability to secure life insurance.

A Genetics Testing Working Group was formed to lead the Actuaries Institute’s responses to the Government consultations, with the most recent public consultation closing last month.

Whilst a total ban was not the Institute’s preferred option, the Working Group believes a ban is still important progress as it gives the Australian community certainty and assurance on the way forward and it will support medical advances that can benefit society in many potentially profound ways.

The submission therefore focuses on helping Government design the ban. It made three key points:  

1. The genetic testing ban should apply during underwriting only. The Institute recommends the ban be limited to the underwriting stage when an individual applies for life insurance. This will ensure that genetic testing results will not negatively impact an individual’s eligibility for insurance or their premiums

The Institute highlighted the importance of insurers being able access genetic test results post underwriting to improve health outcomes. For example:  

• • pharmacogenetics can be used to develop personalised medication regimens;  

• • epigenetics can be used for earlier or more accurate cancer detection; and 

• • medical screening can be stratified based on genetic risk factors. 

The Institute reiterated the importance of applicants continuing to disclose any conditions they have been diagnosed with (irrespective of how the diagnoses were made) and that the ability to underwrite using family history should remain. 

2. If consumers choose to volunteer their genetic testing results, they should be required to submit all of their genetic testing results. If the consumer chooses this option, the insurer would be required to only consider these results if in aggregate they positively impact the underwriting decision. Disclosing the full set of genetic testing results will help fulfil the utmost good faith obligation and avoids selective reporting of favourable results. 

3. The Government should consider an appropriate review process. The Institute recommends a five-year review cycle, or sooner if significant medical advancements occur, as well as regular collection and analysis of population-level genetic testing data. This will allow ongoing monitoring of the policy’s impact on the industry to ensure sustainable provision of affordable life insurance to the community.
 

A key focus of the Institute’s submission was balancing individual access to insurance with equity for the insured population. The full submission can be found here.

We would expect whoever wins Government in the next term of parliament to move quickly to legislate the ban into law. Moving forward, it will be critical for actuaries and insurers to stay abreast of developments in the fast-moving area of genetics and their policy implications. 

For further information and resources for actuaries when considering matters of discrimination in insurance, refer to Risk vs. Discrimination in Life Insurance authored by fellow actuary Kirsten Flynn.

Along with Angela and Aidan, the other two members of the Genetic Testing Working Group that prepared the Institute’s submission to the March 2025 Treasury consultation were Jessica Chen (Chair) and Jenny Ingram.

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