Life insurance genetic testing moratorium implemented at 1 July

The Financial Services Council (FSC) has confirmed the genetic testing moratorium policy will be put into place from 1 July 2019. The moratorium on genetic tests is to be binding for all life insurance members of the FSC and covers every individually assessed life insurance policy in Australia.

The Life Insurance Code of Practice set out by the FSC received significant feedback, causing delays in the initial intention to release the code by 1 July. The new guidelines will be implemented prior to the other changes, and the FSC is looking at other guidelines it can implement prior to the full Code being rewritten.

The moratorium on genetic testing enables access to up to $500,000 of life cover without having to disclose an adverse genetic test result. Other elements of the moratorium include:

  • There is no requirement for consumers to take a genetic test when applying for life insurance

  • Consumers do not have to disclose any genetic tests undertaken as part of research if the consumer does not receive the results

  • If a consumer has a favourable genetic test result, they may disclose it if they want to

  • Insurers will take into account any protective treatment applicants have had

Life insurers can only use relevant genetic tests if consumers apply for:

  • $500,000 life insurance cover

  • $500,000 TPD cover

  • $200,000 trauma cover

  • $4,000 per month income protection cover

These limits are the equivalents of benefit moratorium caps in Switzerland and Germany. The moratorium will be reviewed again in 2022, and will remain in place until 2024.

Read the full media release by the FSC