The Financial Services Council (FSC) has announced that as a result of suggestions from stakeholders including the approval of the Code by the Australian Securities and Investments Commission (ASIC), a rewrite of the Code in plain English and the need for further consultation the revised Life Insurance Code of Practice will not commence on 1 July 2019. Background.
However from 1 July 2019, the FSC will enact a moratorium on life insurance genetic test results as a binding Standard.
The Standard will apply to all 22 life insurer members of the FSC, covering every individually assessed life insurance policy that can be taken out in Australia today.
The moratorium will enable every Australian to get up to $500,000 of life cover without having to disclose an adverse genetic test result.
In addition, the moratorium principles mean:
• Consumers won’t be required to take a genetic test when applying for life insurance.
• Consumers won’t be required to disclose genetic tests taken as part of research if the consumer isn’t receiving the results.
• Life insurance companies will only be able to use relevant genetic tests if consumers apply for more than $500,000 of life or total and permanent disability cover, $200,000 of trauma cover or $4,000 a month of income protection cover. The FSC will review the appropriateness of the limits as part of each formal review.
• Consumers can choose to disclose a favourable genetic test result if they wish.
• Life insurers will take account of any protective treatment an applicant might have had.
The moratorium will be reviewed in 2022 to consider its objectives, the cover levels and the impact on other policyholders. It will be in place until at least 30 June 2024.
