Insurers can’t request that clients undergo genetic testing or share genetic testing results. A ruling upholding that prohibition is a good reminder for insurance advisors to carefully consider the questions they pose to clients.

On July 10, the Supreme Court upheld the Genetic Non-Discrimination Act. Passed in 2017, the act forbids insurers (and other companies) from requiring clients to undergo genetic testing before buying insurance (or other services). Companies also can’t ask for existing genetic test results. To do so is a criminal offence.

David Wm. Brown, a partner at Al G. Brown and Associates in Toronto, says upholding the act is generally positive. Clients retain privacy so they won’t be subject to discrimination, he says, and the Supreme Court decision promotes industry harmonization across the country.

The act’s full effects on clients and insurers — and advisors — could play out further, however.

In a blog post, Torys LLP noted that legislation in every province requires prospective clients to disclose any information that’s material to their insurance.

“Failing to disclose or misrepresenting this information renders the contract voidable by the insurer,” Torys said. “The courts will have to work out how the act affects this fundamental principle of insurance law.”

Torys acted for the Canadian Life and Health Insurance Association (CLHIA), which intervened in the case.

Where does that leave advisors?

The warning is the same as it was three years ago when the legislation was implemented, Brown says: be clear about what you should and shouldn’t ask clients.

“Agents have to remember that they wear two hats,” he says. “They represent their clients to the company, and they represent their companies to the clients. […] They need to be honest and transparent in representing both interests.”

Brown has little concern about negative outcomes for clients or insurers given the robust underwriting process.

Clients must prove they require a requested amount of insurance, plus have an adequate income, to obtain underwriting, he says. As such, the act likely won’t result in a surge in clients looking for — and obtaining — large amounts of insurance coverage motivated by genetic testing results.

Further, clients buying insurance are subject to numerous health-related questions, including about family history. “Based upon the questions [and] attending physician statements, [insurers] are going to know everything anyway,” Brown says.

In some cases, a client may want to authorize access to their genetic test results. For example, if the results show the client doesn’t have a particular gene for a certain cancer common among their family, the client can fill out a form to release the information to the insurer. The test results may help the insurer issue a policy on a standard basis, Brown says.

The insurance industry, which has complied with the Genetic Non-Discrimination Act since its inception, must now make its associated practices permanent, Torys said in its blog post.

Penalties for violating the legislation include a fine of up to $1 million and five years in prison.

CLHIA said in an email that it respects the court’s ruling. “The industry will continue to adhere to the Genetic Non-Discrimination Act,” CLHIA said.