Requiring someone to get a test could also have a significant impact on their life.
What if they find out there’s a chance they’ll get a particular life-threatening disease later in life? How would having this knowledge affect the way they live? And what would this mean for their family members, who may find out - through no choice of their own - they too risk facing a difficult future?
Moran said most other OECD countries restrict insurers’ use of genetic testing.
But New Zealand lawmakers are scrambling to address the issue, almost as an afterthought, as they near the end of a major insurance law revamp that began several years ago.
Parliament’s Finance and Expenditure Committee has recommended the Contracts of Insurance Bill be amended to address “genetic discrimination”.
It said the issue wasn’t included in the bill’s first iteration, so wanted clauses added to give the Government the power to write regulations on the matter in the future.
It recognised the matter was significant enough to warrant being addressed in the law, rather than through regulations under the law.
However, keeping the door open to addressing the issue in the future through regulations was a workable way forward.
The absence of existing legislation or government policies on genetic discrimination meant quite a bit of work would be required 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 recognised the need to thoroughly consider what’s quite a sensitive and multifaceted issue.
She understood the council’s members didn’t ask or incentivise customers to get genetic tests.
“However, in order to fairly assess risk, it may be relevant for some insurers to ask for the results of any genetic test already received,” Stroud explained.
“We recognise that some insurance customers may wish to use favourable genetic test results as part of an insurance application, as the test results may help the insurance application.
“The customer’s privacy is paramount, and an insurer must keep the customer’s information safe.
“An insurer may gather and use a customer’s genetic test results only if: it is relevant to the insurance application, or a claim on that insurance; it is required or permitted by law; and the customer gives the insurer permission to use it for another purpose.”
Coming back to Moran, she believed it wasn’t ideal for the issue to be addressed through regulations, which have a lower status and don’t get as much scrutiny as legislation does.
That said, a number of submitters, including the Privacy Commission and insurance companies, addressed the issue in the feedback they provided the Finance and Expenditure Committee on the Contracts of Insurance Bill.
The committee recognised genetic testing raised several important questions:
“What privacy protections should be placed on someone’s genetic information? What level of legitimate interest does an insurer have in this information? Can an insurer require someone to undergo, or disclose the results of, genetic testing? Can an insurer treat someone differently (either positively or negatively) based on their genetic testing results?”
Moran recognised the issue raised broader questions around the extent to which insurance should be priced on risk.
Insurers will make commercial decisions regarding the number of resources they put into fully understanding someone’s risk profile and pricing their premium accordingly.
On one hand, they wouldn’t want to price in such a granular way that doing so makes their cover unaffordable to the extent they lose customers.
On the other hand, they wouldn’t want to lose business by charging low-risk customers too much more to subsidise high-risk customers.
When it comes to genetic testing, results may not be black and white either.
“It is a little bit like Minority Report, because it’s not saying you have a condition,” Moran said.
“It’s a predictor. And so you’re getting into the risk of a risk.”
The Contracts of Insurance Bill will need to have its second and third readings in Parliament before it becomes law.
From this point, the Government will be able to write regulations addressing genetic testing.
Jenée Tibshraeny is the Herald’s Wellington Business Editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
