AFCA to update rules on new genetic testing laws

The Australian Financial Complaints Authority (AFCA) is proposing to amend its rules in preparation for recent legislative changes on genetic testing protections in life insurance.

Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 passed both houses of parliament on April 1. The ban comes into force from October 8.

The new law bans insurers from using genetic information such as DNA tests when deciding whether to offer life insurance cover. This includes considering the terms and conditions, pricing and exclusions on which the cover is offered.

ASIC will enforce the new legislation as insurers that ignore the ban can face a civil penalty.

Insurers, however, will still be able to access information about a disease for which an individual has been clinically diagnosed with, regardless of whether that information is based on or informed by genetic testing.

Currently, AFCA excludes complaints about underwriting or actuarial factors leading to an offer of a life insurance policy on non-standard terms.

This is proposed to change under new Rule C.1.4b, whereby AFCA must exclude a "complaint about underwriting or actuarial factors leading to an offer of a life insurance policy on non-standard terms unless the complaint relates to an allegation of the solicitation or use of protected genetic information by the life insurer."

Under proposed new Rule C.1.4d, AFCA is set to exclude complaints about a decision to refuse to provide insurance cover except where the complaint is that the decision was made indiscriminately, maliciously or on the basis of incorrect information and the complainant was misinformed about the cover.

The exception would also cover the complaint relating to a medical indemnity insurance product or relates to an allegation of the soliciting or use of protected genetic information by a life insurer.

Some complaints AFCA is anticipating based on the new laws and thereby changes to its rules includes insurers asking for protected genetic information about an individual's genetic testing to consider an offer of life insurance cover and if the insurer uses protected genetic information to refuse the offer of a cover.

AFCA's consultation period ends on June 26.