The government is scrambling to control the ‘Wild West’ of genetic testing and insurers

Requiring someone to take a test can also have a big impact on their life.

Are they likely to develop a life-threatening disease later in life? Would having this knowledge affect how they live? And what would this mean for their family members, who may know – through no choice of their own – they too risk facing a difficult future?

Moran said many other OECD countries restrict the use of insurance in genetic testing.

But New Zealand lawmakers are scrambling to tackle the issue, almost as an afterthought, as they near the end of a major insurance law overhaul that began several years ago.

The Parliamentary Finance and Expenditure Committee has recommended that the Insurance Contracts Bill be amended to deal with “natural discrimination”.

It said that the issue is not in the first iteration of the bill, so it wanted articles to be added to give the Government the authority to write regulations on the issue in the future.

It recognized the issue was serious enough to warrant being addressed in legislation, rather than through regulations under the law.

However, leaving the door open to address the issue in the future through regulation was a viable option.

The absence of existing legislation or government policies on genetic discrimination meant very little work would be needed to properly address the issue.

Haydee Stroud, acting chief executive of the industry body that represents insurers, the Financial Services Council, was pleased the committee recognized the need for serious consideration was a sensitive and multi-faceted issue.

He understood that council members did not ask or encourage clients to get genetic tests.

“However, in order to assess the risk fairly, it may be necessary for some insurers to ask for the results of any genetic test already received,” Stroud explained.

“We recognize that some insurance customers may wish to use genetic test results as part of an insurance application, as test results can support an insurance application.

“Customer privacy is important, and insurers must keep customer information secure.

“The insurer may collect and use the results of the client’s genetic tests only if: they are related to the insurance application, or the insurance claim; required or permitted by law; and the customer gives the insured permission to use it for other purposes.”

Back to Moran, he believed it was not good for the issue to be handled through regulations, which have a lower profile and are not as scrutinized as the law does.

That has been said by some presenters, including the Privacy Commission and insurance companies, addressed the issue in their comments to the Committee on Finance and Expenditure of the Insurance Contracts Bill.

The Committee recognized that genetic testing raised several important questions:

“What privacy protections should be placed on a person’s genetic information? What level of legitimate interest does the insurer have in this information? Can insurance require a person to undergo, or disclose the results of, genetic testing? Can insurance treat someone differently (either positively or negatively) based on genetic testing results?”

Moran recognized the issue raised broader questions about the extent to which insurance should be discounted for risk.

Insurers will make business decisions about the amount of resources they put into fully understanding a person’s risk profile and pricing their premiums accordingly.

On the one hand, they don’t want to set prices so granular that doing so makes their insurance unaffordable enough to lose customers.

On the other hand, they don’t want to lose business by overcharging low-risk customers to subsidize high-risk customers.

When it comes to genetic testing, the results may not be black and white either.

“It’s like a little Minority Reportbecause it doesn’t say you have to,” Moran said.

“He is a prophet. And so you run the risk of danger.”

The Insurance Contracts Bill will need to be read a second and third time in Parliament before it becomes law.

As a result of this step, the Government will be able to write regulations that deal with genetic testing.

Jenée Tibsraeny is the one HeraldWellington Business Editor, based in the parliamentary press gallery. He is specialized in government and Reserve Bank policy making, economy and banking.