New Zealand may be falling behind on genetic testing rules

New Zealand is lagging behind other countries when it comes to managing genetic information in insurance, according to University of Auckland associate professor Dr Rob Young. While insurers can currently use genetic test results to load premiums or exclude coverage for people with genetic predispositions, no hard rules exist yet.

Against Genetic Discrimination Aotearoa (AGenDA) is pushing for a total ban on the practice. Meanwhile, industry attempts to self-regulate have stalled due to legal concerns of anti-competitive behaviour. All of this has left the sector uncertain about how to proceed.

In a recent Financial Advice New Zealand (FANZ) webinar, Dr Young says we’ll likely go one of three ways - the Canadian, UK, or Australian route.

Global models point in different directions
Right now, New Zealand is in a “watch and follow” stage. Different countries have taken vastly different approaches to genetic testing in insurance.

Canada has gone the furthest, implementing a full ban on accessing genetic information for life and health insurance. There are heavy penalties for breaching this.

The UK has moved from a moratorium to a code of practice. Anyone applying for cover under a certain threshold (for example, £500k in life insurance or less) does not need to disclose genetic results. The UK has also limited the types of genetic tests that can be done to Huntington’s Chorea only.

Australia has banned access to genetic testing for health insurance, largely due to its Disability Discrimination Act 1992, which covers those who have a genetic disposition to an undiagnosed disease.

For life insurance, there is a semi-voluntary moratorium which is coming under challenge. This sets cover thresholds for when genetic testing can be used, similar to the UK.

“Some feel there isn’t enough disincentive for the industry to breach restrictions,” Dr Young says.

“This is being closely reviewed by the Australian government as to whether they need to bring in more restrictive legislation to manage the potential for genetic discrimination.”

“In 5-10 years’ time, do we find ourselves in Canada’s position, in Australia's current position, or the UK’s?” he adds. “The New Zealand community -  the researchers and providers of genetic testing - are closely watching these countries to see how this goes forward.”

An industry caught between competing pressures

On one hand, insurers say they need genetic information to accurately assess risk and prevent anti-selection.

On the other, they're facing mounting pressure from advocacy groups, the medical community, and politicians who see genetic testing as fundamentally unfair.

The FSC has tried to find middle ground with guidelines recommending insurers shouldn't encourage genetic testing or ask for tests from relatives, though family history questions remain allowed. But even this compromise approach has run into trouble.

“The FSC could see the writing on the wall, and had caught wind of the fact that there was quite a strong lobbyist group developing in New Zealand,” Dr Young explained.

“It is huge, incredibly well organised, and it is going after a Canadian all-out ban. With the recent reading of the Insurance Contract Bill, they have inserted themselves into this discussion with great success and really forced the government to acknowledge that there needs to be something to mitigate discrimination based on genetic testing in the insurance world.”

Faced with this pressure, a group of interested parties met under the FSC to develop solutions. But even this effort stalled over concerns about "cartel behaviour" from insurers trying to form a united decision on genetic testing regulations.

The impasse has left both sides frustrated

“People are coming at this from very widely diverse viewpoints,” Dr Young says. “Fortunately, family history at least seems to be off the table, as it is elsewhere. That is still a very important source of risk information for the industry.”

The Select Committee has decided that it will look at the issue, but not immediately - and not in the context of the Insurance Contracts Bill. Until things start to move there, the industry will be stuck in “wait and see”.