The use of genetic testing results in life insurance

The use of genetic testing results in Australian life insurance has been the subject of public, industry and regulatory scrutiny over recent years. 

This article provides a brief recap of developments in the use of genetic testing results, as it relates to life insurance.

What was the genetic testing moratorium in life insurance?

In July 2019, the life insurance industry introduced an industry‑led moratorium restricting the use of predictive genetic test results in life insurance underwriting. This followed concerns raised in 2018 by a Parliamentary Committee that the use of genetic testing in underwriting was adversely impacting participation in health research projects involving genetic testing.

The moratorium limited insurers’ ability to use genetic test results below specified financial thresholds and relied on self‑regulation rather than legislation or government oversight. It was initially administered by the Financial Services Council and later incorporated into the Life Insurance Code of Practice administered by the Council of Australian Life Insurers (CALI).

In June 2023, Monash University published the Final Stakeholder Report from the Australian Genetics and Life Insurance Moratorium: Monitoring the Effectiveness and Response (AGLIMMER) Project, a Commonwealth Government‑funded review of the moratorium. The report concluded that genetic discrimination in life insurance underwriting continued to occur in Australia, and that fear of discrimination was deterring individuals from undertaking potentially life‑saving genetic testing and participating in genetic research.

The industry moratorium was considered an inadequate solution to genetic discrimination in life insurance, and there was strong stakeholder support for formal legislative protection to regulate the use of genetic test results in life insurance underwriting.

When does Australia's new genetic testing law take effect?

Following extensive public consultation and stakeholder engagement starting in 2023, the Australian Parliament passed the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act on 1 April 2026, with Royal Assent received on 8 April 2026. The legislative ban will apply to life insurance contract decisions made on or after 8 October 2026.

A Genetics Testing Working Group (GTWG), reporting to the Life Insurance Practice Committee (LIPC), was established in 2023 to support the Actuaries Institute’s engagement on genetics and life insurance. The GTWG led the Institute's responses to the Government consultations and contributed articles and commentary through Actuaries Digital on the genetics moratorium and subsequent legislative reform.

What does the new genetic testing legislation cover?

The legislation:

• Prohibits life insurers from soliciting or using certain “protected genetic information” in underwriting life insurance contracts;
• Aligns the Insurance Contracts Act 1984 and the Disability Discrimination Act 1992 to strengthen protections against genetic discrimination;
• Allows the continued use of family history of a disease, the existence of signs, symptoms or clinically diagnosed diseases, even where informed by genetic testing;
• Allows voluntary disclosure of genetic test results by individuals and the use of these results subject to consent, and provided it does not disadvantage the applicant;
• Includes civil and criminal penalties for non‑compliance, regulated by the Australian Securities and Investments Commission (ASIC); and
• Requires a statutory review every five years to assess effectiveness and any unintended consequences.

This legislation defines genetic testing as the analysis or interpretation of information derived from:

• An individual’s deoxyribonucleic acid (DNA), ribonucleic acid (RNA) or chromosome;
• Any molecules or factors that influence or modify an individual’s gene expression (including epigenetic tests), conducted to detect, infer or predict genotypes or genetic variants or predict disease risk; or
• Any product of an individual’s gene expression (such as a protein), biomarkers or metabolites conducted to detect, infer or predict genotypes or genetic variants or predict disease risk.”

The acceleration of scientific developments, enabled by increased computing power, data storage and more recently, the use of artificial intelligence, is resulting in significant improvements in the speed, accuracy and accessibility, and reductions in the cost of genetic testing.

What does this mean for actuaries and the life insurance industry?

These developments, combined with the ban on their use in life insurance underwriting, may have potentially significant implications for the life insurance industry. Information asymmetry creates an anti-selection risk, with associated implications for equity, pricing and sustainability. However, many factors will impact the outcome, for example:

• The availability and uptake of genetic testing, driven by factors such as the extent to which it becomes part of clinical routine, cost and whether the cost is covered by health insurance.
• The predictive power of genetic testing, which continues to develop with increasing databanks, research studies, and more variants being identified.
• The extent to which individuals increase their insurance cover (anti-selective behaviour) following an adverse genetic test result.
• The extent to which factors being used within the underwriting process, such as family history, lifestyle and environment, are adequate to determine the underlying risk. Research on the relative contributions of genetics and lifestyle, which vary by disease, continues to improve knowledge.
• The extent to which individuals will make changes to their lifestyle following an adverse predictive test result will impact the ultimate risk of developing the disease, to varying degrees for different conditions.
• An increased uptake of genetic testing is expected to result in significant benefits for individuals, the public and science. By enabling prevention, earlier disease detection, faster diagnosis and more effective personalised treatment, it also has the potential to improve population health and reduce health and life insurance costs in the longer term.

It is therefore critical for actuaries and insurers to stay abreast of developments in this fast-moving area and understand the implications for life and health insurance. The recent legislative reforms and heightened public scrutiny underline the need for the Actuaries Institute to have a credible voice in ongoing policy settings.

One of the objectives of the Genetics Sub-Committee of the Life Insurance Practice Committee is to help actuaries stay abreast of developments in genetic science and consider their potential implications for insurance. We will be keeping the actuarial profession informed through a series of articles in Actuaries Digital in coming months.

References

Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025

Use of genetic testing information by life insurers | The Office of Impact Analysis

Use of genetic testing results in life insurance underwriting | Treasury.gov.au