The federal government will bar life insurers from using genetic test results to assess underwriting risks, a move that has the backing of the industry.

Financial Services Minister Stephen Jones made the announcement today, after a Treasury-led consultation with stakeholders including the Council of Australian Life Insurers finished earlier this year.

The “total ban” will be subject to five-yearly reviews to ensure there are no unintended consequences, according to a statement from Mr Jones’ office.

“This change will give Australians the confidence to undertake genetic testing without fear it will impact their ability to access financial security through life insurance,” Mr Jones said.

“I have met with countless people affected by this issue and thank them for sharing their stories and helping to drive this important change. The engagement from the community on this issue speaks to the importance of this announcement for so many Australians.”

The government says the consultation received more than 1000 submissions, with 97% supporting a total ban.

Treasury’s consultation paper proposed three regulatory options: no government intervention; legislating a total or partial ban; or legislating financial thresholds at which insurers cannot request or use adverse genetic test results in their underwriting.

At present, the industry has a self-regulated moratorium on the use of genetic testing in life insurance. It was introduced in 2019 and extended indefinitely under changes to the industry’s code of practice from July 1 last year.

The moratorium was introduced in response to concerns that people would not take genetic tests for fear of negatively affecting their ability to obtain affordable life insurance.

However, it has failed to achieve its intended results, Treasury says, citing findings from a federally funded report by Monash University researchers.

Council of Australian Life Insurers CEO Christine Cupitt says the peak body has “long been clear about the need for strict regulation to ensure no one is deterred from taking a genetic test to proactively manage their health”.

CALI says Australian life insurers have never, and would never, require someone to take a genetic test for the purposes of underwriting.

“It has never been our intention to deter people from taking genetic tests that give them more information about their overall health,” Ms Cupitt said.

“Life insurers want to support Australians to manage their health in a preventative way and recognise that genetic testing plays an important part in empowering them to do so.”

Australian Medical Association president Steve Robson says today’s announcement is “fantastic” news for consumers and the health system.

“We know that the fear of being denied insurance coverage has been a huge disincentive for Australians to have genetic testing when they need it,” he said.

“Seeing this situation fixed is an enormous step forward for healthcare in this country.”