Insights from the FSC's recent workshop-style event that aimed to help prepare the industry for full compliance with the moratorium in a consistent and customer-centric way.

By Mary-Rose Garcia 

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Following the FSC's 'Genetics Moratorium: The Practical Considerations for Underwriting and Claims' session on 19 September, we caught up with guest speaker Mary-Rose Garcia, Senior Legal Counsel, MLC Life Insurance on some of the key insights.

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What are some of the key considerations when collecting family history and genetic test results of relatives?

The Moratorium is clear that a life insurer is able to request information concerning family history of first degree relatives, specifically the diagnosis of particular genetically-linked conditions. It is important however to limit disclosure of a family member having had a particular condition. It is not open to the insurer to ask if a family member has had a genetic test nor the result of that genetic test.

The life insured or policy owner’s knowledge of their family medical history may be very limited. The disclosure is confined to what is known to the life insured or policy owner.

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How should life insurers approach the issue of asking if applicants have a favourable genetic test result they’d like to declare? Could they ask if the applicant has had a genetic test without asking for the result, or should they not ask at all and just ensure the customer knows they can declare a favourable result if they have one?

Up to the financial limits, the Moratorium prohibits asking for genetic test results. A life insurer’s obligations in relation to confidentiality, privacy, under the Life Code and fairness requires that information requested from a customer is confined to that which is reasonably necessary in light of the purpose for which the information is being collected. That is, to assess the customer’s application for cover.  These considerations, in my view, point to the position that the question ought not to be asked at all unless the cover exceeds the Moratorium financial limits.

At present the Moratorium applies to insurances that are most likely “advised” (but to be clear, group or direct insurances that are underwritten are caught also).  I am of the view that it is crucial that life insurers educate advice licensees about the Moratorium so that customers, via their advisors, can make an informed decision about their application, the implications of the Moratorium and disclosing genetic test results as may be necessary or appropriate for their circumstances. It’s terrific that the FSC has developed a Fact Sheet that can be used by Genetics Counsellors to answer any questions that people might have, and also to help financial advisers help their customers navigate the Moratorium in each customer’s best interests.

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What is the one key takeaway from the recent FSC Genetics Moratorium event that you think is important for industry to keep in mind?

There may be some aspects about genetic tests that may still cause confusion for both the life insurer and the customer about what needs to be disclosed. The discussion about Lynch Syndrome, for example, made it very clear to me that there is need for underwriting guidelines, staff training and FAQs for customers and their advisors in relation to the Moratorium so as to avoid mistakenly obtaining test results that the life insurer is not entitled to.

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For more insights from event speakers, watch here for comments from Shane Burdack, Senior Underwriting Consultant, Swiss Re and here for thoughts from Dr Sally Phillips, GM - Health Services, TAL Life.

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If you missed the event and would like a copy of the audio recording of the session, please see here.

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WATCH: Nick Kirwan, Senior Policy Manager - Life Insurance, FSC, shares some event news:

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