No talks before policy cap plan

The lobby group for the life ­insurance sector proposes a $500,000 cap for people disclosing adverse tests for genetic diseases.

FSC life insurance policy manager Nick Kirwan

The Financial Services Council, the lobby group for the life ­insurance sector, failed to consult with Treasury, the Health ­Department, or genetics experts before announcing a proposal that would cap policies for people disclosing adverse tests for genetic diseases at $500,000.

The newly announced “moratorium” by the FSC, which MPs instructed to be modelled on a legal framework in Britain, has already fallen under criticism for limiting insurance at levels lower than what is ­required to ensure claimants can properly provide for their dependants.

While the British system applies an insurance limit of £500,000 ($900,000) only to policyholders who have tested positive for Huntington’s disease, the FSC’s proposal places far harsher limits on people who choose not to disclose adverse results for any disease discovered by genetic tests, or even that they may be vulnerable to such diseases.

This is just $500,000 for death and total and permanent disability insurance, $200,000 for trauma, $4000 a month for income. It is an improvement over the current FSC industry rules, where insurers can deny coverage or limit sums insured if consumers have had adverse test results.

Monash University public health genomics legal adviser Jane Tiller, a founding member of the cross-sector Australian Genetics Non-Discrimination Working Group, said with uncertain exclusions for participating in medical research, and with much lower limits on insurance benefits, the FSC’s plans were “worse than the UK on all fronts”.

Ms Tiller said the British moratorium — preferred by the parliamentary committee — had “absolutely no limits” for all but a very small number of Huntington’s disease sufferers, and “even those limits are significantly higher than the proposed Australian limits”.

FSC life insurance policy manager Nick Kirwan said the FSC had previously held meetings with geneticists who had “differing views”, and with the government and the parliamentary joint committee on financial services.

“The principal ask from ­geneticists has been for the FSC to establish a moratorium,” Mr Kirwan said, noting that the proposed limits were roughly equivalent to similar systems in Germany and Switzerland and more generous than systems in Sweden and The Netherlands.

“Treasury was not approached by the FSC in regards to this announcement,” a Treasury spokeswoman said. “The federal Department of Health was not consulted by the FSC on its recent announcement,” a spokeswoman said.

Labor senator Deborah O’Neill, deputy chair of the parliamentary committee that conducted an 18-month investigation of the life insurance industry, said the planned moratorium was “a step forward” and “the first time the industry has acknowledged there is an issue with genetic testing”. But she said she was concerned about the FSC’s lack of consultation.

“Unilateral decision-making from a body that represents a sector that has been so compromised is not going to enhance their reputation in the community,” Ms O’Neill said.

It’s the second time this year the under-siege FSC has failed to consult with genetics experts before announcing plans for the scandal-ridden life insurance ­industry.