An Australian insurance firm has become the subject of criticism after offering customers reduced price genetic tests while providing in the small print that the results are to be made available for consideration by life insurance providers should they desire them.

Nib Health Funds Ltd. invited 5,000 of its customers to receive a thousand dollar genetic test provided by Californian firm Navigenics at a reduced price of $499. The firm also offered to provide genetic counselling to those who took up the offer and stated that the company hoped that those who received test results would be able to 'take steps to improve their health'.

Australian legislation prevents insurance companies from rejecting applicants on account of information brought to light by genetic testing but it does not prevent firms from using such information to adjust premiums. That the information yielded by the cut priced tests could be employed by the companies in this way is noted in the offer letter but only in the fine print of a footnote to the invitation.

Once genetic test results are known such information must be revealed by potential policy holders when applying for a range of insurance products that relate to long term health, including mortgage and income protection, life insurance and some super-annuation funds. Failure to yield relevant information may ultimately lead to a refusal to pay-out.

Even though doubt has been thrown on the relevance of findings in genetic tests given to those currently in good health, privacy advocates warn that the obligation to reveal the results of such tests put the insurance companies in a dominant position over the consumer and may make it hard for them to receive fair treatment when seeking coverage.