This bill inserts a new Division into the Insurance Contracts Act 1984 that defines “genetic testing” and “protected genetic information” and makes it an offence for an insurer to solicit or use protected genetic information when conducting life insurance underwriting. The core prohibition is strict liability, with a criminal penalty and a large civil penalty alternative, but the bill creates a narrow consent exception and gives ASIC the power to approve a consent form.
Beyond life-insurance rules, the bill amends the Disability Discrimination Act to treat discrimination based on protected genetic information in life insurance as unreasonable, adjusts duty-of-disclosure and misrepresentation rules in the Insurance Contracts Act to exclude protected genetic information, mandates quinquennial reviews of the new regime, and packages unrelated reforms: licensing exemptions and conditional pathways for certain foreign financial services providers, modernization of multilateral development bank legislation, and repeal of Stage 2 financial adviser registration.
At a Glance
What It Does
The bill prohibits insurers and anyone assisting underwriting from soliciting or using protected genetic information for life insurance decisions, defines the covered genetic data, and establishes criminal (strict liability) and civil penalties. It preserves a narrow consent route and requires ASIC-approved processes where applicable.
Who It Affects
Life insurers, their underwriting service providers and brokers, applicants and policyholders with genetic test results or genetic relatives, treating medical practitioners who may be asked to release genetic information, and ASIC as the regulator administering forms and enforcement. It also affects foreign financial services providers via new licensing exemptions and the Treasury’s handling of multilateral bank obligations.
Why It Matters
The bill changes the information insurers may lawfully use in pricing and eligibility decisions—altering underwriting inputs, compliance workstreams and risk modelling—and reduces the legal obligation on applicants to disclose genetic-test-related information. It simultaneously opens new market access pathways for foreign providers under guarded conditions, and updates Australia’s approach to multilateral development bank financial obligations.
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What This Bill Actually Does
The bill creates a new, self-contained prohibition in the Insurance Contracts Act forbidding the solicitation or use of "protected genetic information" in any life insurance underwriting that informs a life insurance contract decision. "Protected genetic information" covers whether a person (or a blood relative) has undergone, intends to undergo, or has been recommended to undergo genetic testing, and includes test results. The definition expressly allows regulations to add or remove specific tests or information from the ambit of "genetic testing" or "protected genetic information." The prohibition applies to insurers and to any person who conducts or assists with underwriting.
Enforcement is layered. The primary criminal provision is strict liability: an insurer commits an offence if it makes an underwriting-based life insurance decision and protected genetic information was solicited or used in the underwriting.
The offence attracts a penalty of 60 penalty units. A civil penalty alternative sits alongside the criminal offence with an exposure of 5,000 penalty units.
The statute builds in a consent exception: protected genetic information may be used if the life insured (or an authorised treating medical practitioner or agent) voluntarily gives it, the insurer did not solicit it, the insurer obtained written consent for the use, the consent complies with an ASIC-approved form if one exists, and the use does not disadvantage the insured or beneficiaries.The bill removes protected genetic information from the scope of life-insurance disclosure duties and from being treated as a misrepresentation if not disclosed before contract formation. It also amends the Disability Discrimination Act to treat life-insurance decisions based on protected genetic information as unreasonable discrimination.
The new Division includes a mandatory review mechanism: the Minister must commission and table reviews every five years examining effectiveness and unintended consequences.Separate Schedules sit alongside the genetic-testing protections. Schedule 2 creates time-limited exemptions in the Corporations Act allowing foreign providers to offer certain services without an Australian financial services licence where services are to professional investors or wholesale clients, subject to notification to ASIC and a set of conditions (agent requirement, information sharing with ASIC/comparable regulators, submission to jurisdictional arrangements, and limits on marketing visits—28 days per representative per financial year).
Schedule 3 modernises statutes governing Australia’s obligations to several multilateral development banks by defining "relevant financial obligations," authorising the issue of non-negotiable, non‑interest-bearing securities in lieu of payments and clarifying appropriations and delegations. Schedule 4 repeals Stage 2 financial adviser registration requirements.
The Five Things You Need to Know
The bill makes it a strict liability criminal offence for an insurer to make a life-insurance decision that relied on underwriting which solicited or used protected genetic information; the criminal penalty is 60 penalty units.
A separate civil-penalty provision exposes insurers to 5,000 penalty units for contravening the prohibition on using protected genetic information.
Protected genetic information includes whether an individual or a blood relative has undergone, intends to undergo, or was recommended to undergo genetic testing, and it includes test results; the definition also allows regulations to tailor coverage.
The law preserves a consent pathway: if the life insured (or an authorised treating practitioner or agent) voluntarily provides the genetic information, and the insurer did not solicit it, the insurer may use it only with written consent (in an ASIC-approved form if one exists) and only if the use does not disadvantage the insured or beneficiaries.
Schedule 2 creates licensing exemptions for certain foreign financial services providers serving professional investors or wholesale clients, subject to notification to ASIC, conditions (including agent, information-sharing and fit-and-proper carve-outs), and a 28-day per-representative cap on marketing visits in a financial year.
Section-by-Section Breakdown
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Definitions: genetic testing, protected genetic information and solicitation
This group of provisions sets the statutory meanings that determine the bill’s scope. They characterise genetic testing broadly—DNA, RNA, chromosomal analysis, epigenetic tests, biomarkers and other gene-expression products when used to infer genotype or disease risk—and make solicitations (including recommending testing) actionable. The drafting gives the executive power to refine the scope by regulation, which means the practical boundary between covered and excluded tests will be set later and could shift with scientific developments.
Prohibition and penalties on using protected genetic information in underwriting
Section 33H creates both a strict liability criminal offence and a separate civil penalty for taking protected genetic information into account in life-insurance underwriting. It applies not only to insurers but to any person who conducts or assists with underwriting, so third-party data processors, reinsurers and medical consultants are captured. The section treats the mere use or solicitation of the information as culpable regardless of whether it affected the underwriting result, lowering the evidentiary threshold for regulators and prosecutors but raising compliance risk for insurers.
Consent exception and ASIC-approved consent form
The statute permits use of protected genetic information if the information was voluntarily provided by the life insured, an authorised treating practitioner, or an agent, provided the insurer did not solicit it and obtained written consent. ASIC may approve a particular consent form by notifiable instrument; if such a form exists, consent must be in that form. The provision also requires that use of the information must not disadvantage the insured or beneficiaries, a standard that will need operational guidance to apply in pricing and claims contexts.
Duty of disclosure and misrepresentation—protected genetic information excluded
The bill amends disclosure and misrepresentation rules so an insured does not breach duties by failing to disclose protected genetic information, and insurers cannot rely on pre-contract sickness or disability exclusions tied to undisclosed genetic predispositions in defined circumstances. The changes narrow insurers’ contractual remedies tied to non-disclosure of genetic data and shift the compliance focus back onto insurers to establish risk without relying on applicant genetic data.
Mandatory five-year reviews and parliamentary tabling
The Minister must commission reviews of the Division and related provisions every five years and table the reports in both Houses within 15 sitting days. Reviews must assess effectiveness, certainty for individuals and unintended consequences—setting a statutory cadence for empirical evaluation and potential legislative refinement.
Foreign financial services licensing exemptions—notification and conditions
Schedule 2 inserts targeted exemptions from the requirement to hold an Australian financial services licence for foreign providers serving professional investors or wholesale clients, and for certain derivatives market-making. Exemptions are conditional on notification to ASIC within a specified window, consent to information-sharing with comparable regulators, agent and jurisdictional arrangements, limits on marketing visits (28 days per representative per year), and ASIC’s power to impose, vary or cancel conditions.
Modernising MDB payments and appropriations
This package defines a new administrative category—"relevant financial obligation"—and authorises issuing non-negotiable, non‑interest-bearing securities (promissory notes) in lieu of cash payments to certain international banks, clarifies appropriation authority for those obligations, and creates delegation power for the Treasurer or Minister. It also repeals outdated subscription Acts and contains transitional clauses preserving existing agreements and securities.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Applicants and policyholders with genetic predispositions—They gain legal protection from insurers using their genetic-test status or a relative’s testing history in underwriting, reducing the need to disclose such information and lowering risk of refusal or penal pricing based on genetic data.
- Consumers generally concerned about genetic privacy—The bill creates a statutory backstop preventing insurers from soliciting or using sensitive genetic information, which may increase willingness to take up clinically useful tests without insurance-related deterrents.
- Medical practitioners and genetic counsellors—They receive clearer boundaries on when patient genetic information can be shared with insurers (consent-driven pathways), reducing requests to disclose test results and clarifying professional responsibilities.
- Foreign financial services providers—Those that meet the bill’s conditions benefit from new, conditional exemptions that make it easier to provide services to Australian professional investors and wholesale clients without an Australian licence.
Who Bears the Cost
- Life insurers—They face direct compliance costs to change application forms, underwriting manuals, third-party vendor contracts and dataflows; potential legal exposure under criminal and civil regimes; and the need to re‑model pricing absent genetic inputs.
- Brokers and underwriting intermediaries—They must adjust intake processes, train staff to avoid solicitation, manage written-consent paperwork and reframe advice to applicants; failings by intermediaries can trigger insurer liability under the strict-liability standard.
- ASIC and Treasury—ASIC gains new administrative responsibilities (approving consent forms, processing exemption notifications, monitoring foreign providers) and enforcement workload; Treasury must manage MDB reporting and legislative instruments listed in the bill.
- Genetic testing providers and research programs—They may see reduced demand for non-clinical genetic tests used for predictive purposes and face requests to resist insurer access to test results, complicating data-sharing arrangements and commercial models.
Key Issues
The Core Tension
The central dilemma is reconciling individuals’ genetic privacy and anti‑discrimination protection with insurers’ legitimate need for actuarial information to price risk and maintain affordable, sustainable pool pricing—protecting test-takers reduces a source of adverse-selection information, but allowing insurers to use genetic data undermines privacy and can chill beneficial testing; the bill privileges privacy and consumer protection while relying on regulatory detail and market adjustments to manage the insurance-market consequences.
The bill leaves several implementation choices to regulation and administrative practice that will determine its real-world impact. The definitions delegate significant scope decisions to regulations—what counts as a covered test, which genetic predispositions remain excluded if clinically diagnosed, and what information from clinical care is outside protection—so outcomes will depend on future rulemaking.
The consent exception is operationally complex: it requires that the insurer did not solicit the information, that consent is written (and in ASIC form if one exists), and that the use does not disadvantage the insured; those qualifying conditions invite disputes about what constitutes solicitation, valid consent, and disadvantage in pricing or claims contexts.
Enforcement design presents trade-offs. The strict-liability criminal offence simplifies prosecution because liability does not require proof of intent, but it raises compliance risk for insurers and service providers who may be convicted even where an underwriting assistant inadvertently handled protected data.
The defendant bears an evidential burden to show the consent exception applies, which shifts practical pressure onto insurers to document processes meticulously. At the same time, exempting insurers from relying on applicants’ non-disclosure of protected genetic information reduces insurer remedies against non-disclosure and increases the theoretical risk of adverse selection—potentially pressuring premiums or product availability if actuaries cannot substitute other reliable risk signals.
Finally, the bill packages unrelated reforms (foreign licensing exemptions and MDB technical changes) that raise separate administrative and policy issues. The new foreign-provider exemptions create conditional market openings but also require ASIC to exercise judgment about comparable regulators and fit-and-proper workarounds; the MDB changes expand the executive’s discretion to issue securities in lieu of cash, which has fiscal and transparency implications that will hinge on the use of the new notification instruments and the content of Treasury reporting required by the amendments.
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