A moratorium on genetic testing in the life insurance industry means that Australians can get up to half a million dollars of life cover without disclosing genetic tests.
The Financial Services Council approved a moratorium on genetic tests in life insurance following consultation with the insurance industry.
FSC chief executive Sally Loane said: "We know the community benefits from genomic research and the Moratorium is key to giving Australians the reassurance they need and the flexibility to evolve as the science does."
She explained that genetic testing has led to better treatments for a number of illnesses, including breast cancer, and has allowed people to better manage their own health risks.
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"Australia aims to be at the forefront of genomic science and is now the only country in the world outside the United Kingdom where a favourable genetic test result can be disclosed, but an adverse result doesn't have to be," Loane said.
"The FSC believes it is vital to have an agile solution like a Moratorium which, unlike legislation, can easily adapt and change as new breakthroughs are discovered - which is why we committed to having it in place by 1 July this year."
The moratorium will be regularly reviewed and will be included in the Life Insurance Code of Practice which is currently under review.
The new moratorium will be in place at least until the end of June 2024 and reviewed in 2022 with a view to extending the date.
It allows consumers to choose to disclose favourable genetic testing results.
The FSC said the updated moratorium brings Australia in line with the UK, Switzerland, Germany, Holland and Sweden.
At the recent Actuaries Institute Summit in Sydney Westpac Group director of insurance, finance Jessica Chen provided insight into genetic testing in the life insurance industry.
She said genetic information can provide additional information to family history and that it would be useful for insurers to know both to properly assess risk, but also highlighted the fact that research into how genes can predict illness is still developing at a rapid pace.
Chen brought up a study which - in small part - informed the moratorium in which two groups were offered genetic testing - one group was told about life insurance disclosure policies and one was not. People in the group that was told about disclosures were more likely to decline the test.
"We know that the Parliamentary Joint Committee recommended a moratorium for that and other reasons, but there could be different evidence put forward," Chen said.
"I encourage that we take more action on this debate and that actuaries use their knowledge and have a voice," she added.