Genetic testing reform is here. What advisers need to do next

For years, Australians have made health decisions that shouldn't have been in conflict with their financial future.

Despite medical advice to test for hereditary cancer risk, some chose not to proceed. Not because they feared the result, but because they feared the insurance implications. In one documented case, a woman who tested positive for a BRCA variant (a hereditary mutation that significantly elevates breast and ovarian cancer risk) took preventive surgery to reduce her risk - and was still hit with premium loadings and cancer cover exclusions.

That was a rational concern. Depending on the insurer and level of cover, predictive genetic test results could affect eligibility, pricing or exclusions. It created an uncomfortable trade-off: access potentially life-saving information or protect insurability.

The Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026, passed in April and in force from October 8, ends that trade-off. Here's what advisers need to know.

What passed and what it means

From October 8, insurers can no longer use predictive genetic test results in underwriting life (for example income protection, TPD or trauma insurance), including whether a test was recommended or undertaken by a family member.

The key distinctions your clients need to understand:

• Favourable results can still be shared voluntarily. Clients who've tested and got good news aren't prevented from disclosing that.
• A clinical diagnosis remains disclosable. Even if that diagnosis was first identified through a genetic test, the confirmed condition still needs to be declared. Predictive information is protected; a confirmed condition is not.
• Existing clients aren't locked in. Someone underwritten under the old rules can apply for new cover from October, and that application starts clean, without reference to any prior genetic results.
• A complaints pathway is coming. AFCA is moving to ensure clients who believe an insurer has breached the new rules have a direct path to dispute resolution, with its own rule changes expected to land on 8 October.

Why did this take 10 years?

A parliamentary inquiry called for this reform in 2018, but the issue had been identified well before then. The industry's response was a voluntary moratorium through the Life Insurance Code of Practice in 2019, limiting use of results below certain cover thresholds. It was a compromise, and the research suggests it fell short. Clinicians, patient groups and government-funded studies consistently found it made little difference to whether people actually went ahead with testing. The system changed; client behaviour did not.

That's not surprising. Voluntary restrictions on information that underpins commercial pricing decisions are difficult to make work. Without independent oversight, compliance can't be verified, and without verification consumers have little reason to trust the system. It was as much a design problem as a policy one. Legislation resolves it by removing the ambiguity entirely.

The FAAA concern: legitimate tension, worth taking seriously

The Financial Advice Association of Australia (FAAA) was explicit that it supported giving Australians greater confidence to undergo genetic testing. But it raised a concern that deserves honest engagement: if insurers can't ask about genetic test results, people who already know they carry high-risk variants can take out significant cover without that risk being priced in. Over time, claims from that group could push up costs for everyone else in the pool. It's not a fringe view. It's a rational actuarial concern, and the FAAA argued for a legislated moratorium with indexed caps rather than an outright ban.

The counterargument is that any threshold system still leaves people seeking higher levels of cover exposed to the discrimination the reforms were designed to end. A cap of $500,000 sounds like protection until your client needs $2 million of cover and has a Lynch syndrome result on file.

The honest answer is that nobody knows yet how this plays out at scale. Which is why the legislation includes a five-year statutory review. If that shift in claims does emerge as a material problem, there's a mechanism to respond. That feels like the right call: legislate the principle, monitor the reality, adjust if needed.

For advisers, the practical takeaway is that clients who previously avoided testing, or who have existing genetic test results, may not be aware of how the new protections operate. Revisiting those discussions and helping clients understand what has changed, and what it does and does not mean for future insurance applications, is worthwhile.

The risk hiding in plain sight

Most of the debate around these reforms has focused on one direction of risk: that people with concerning genetic results might use the new rules to access cover insurers can't adequately price. It's a legitimate concern, but it's not the only one worth thinking about.

Consider the flip side. Some clients in your book may have quietly decided not to test because the insurance implications felt too costly. The result is that they could be carrying hereditary risks, cancer syndromes, familial hypercholesterolaemia, cardiac conditions, that have never been properly investigated and were never factored into their financial plan. In reality, their entire risk picture may have been shaped by a decision to stay in the dark.

This isn't just an insurance issue. It's a health information issue. The legislation removes two barriers simultaneously: a barrier to insurance access, and a barrier to potentially life-saving health information. The second of those may ultimately matter more.

Who in your book needs to hear this?

Who might have made a health decision, or avoided one, because of insurance concerns?

Review your client list with that question in mind:

• Clients with family history flags, cancer syndromes, cardiac conditions or lipid disorders, who may have sidestepped testing because the insurance stakes felt too high
• Clients who deferred medical investigations at some point, where the timing suggests insurance anxiety may have played a role
• Clients with older cover where the sum insured and product structure were set without full visibility of their actual risk profile
• Clients approaching new cover or a major review, for whom the sequencing of testing, disclosure and cover decisions now looks quite different to how it did six months ago

One thing worth sitting with: some people avoided tests during those 10 years that could have caught serious conditions earlier. Some of them will have gone on to develop those conditions. The delay had a human cost that no legislation can undo.

What the law has done is remove the barrier that caused it. A client who was afraid to know something about their own health can now choose to know it, without fearing it will cost them their financial security. What the advice profession does with that is still being written.