Site navigation

Change font size: SmallerLargerReload

navigation Disability Rights

Disability discrimination and insurance

Australian Life Underwriters Association and Claims Association conference
5 November 2000
Graeme Innes AM
Deputy Disability Discrimination Commissioner

 Graeme Innes

Although it is a long time now since I studied insurance law, I can at least still recall the principle that insurance contracts ought to be approached with the utmost good faith, with parties to the transaction being able to rely on each other disclosing anything that might be relevant. So in that spirit, let me start by disclosing that although I was very happy to accept the invitation to speak today, at the outset I was rather uncertain about what I should say.

I was happy to be invited here because of the importance of equitable access to insurance as a key aspect of equal participation by people with disabilities in the economic and social life of our community. It seems to be one of the laws of life that anything which carries rewards also carries risks, and insurance is no less important to people with disabilities than to other members of the community in dealing with those risks - whether it is the risk of being injured at work as a member of the paid workforce, or the financial risks which we accept in being responsible for a family or buying a home, or risks in travelling, or - most topically - the physical risks which we accept in playing sports.

During the Paralympics public attention has been drawn in all sorts of dramatic ways to people with disabilities as people with abilities and aspirations, goals and achievements, skills and determination. Sometimes the public and media enthusiasm has seemed like the excitement of discovery of a new continent, of people with disabilities being newly charted territory. But just as Australia was already well known to its prior owners before being "discovered" by Europeans, there have in fact been people living in this brave new world, this world where the population includes people with disabilities, for quite a long time - all our lives in many cases.

I confess that I have been surprised by people appearing to find new and surprising some things which I had come to think were already more common knowledge - about what people with disabilities can do and aspire to do, and also about unnecessary barriers to access and participation, like barriers in the built environment in Australia, or barriers in people's attitudes and expectations, and the importance of continuing work to remove those barriers and avoid building new ones. The lesson perhaps is not to be shy about stating the apparently obvious. I'm sure I remember something along those lines from contract law lectures, too.

I'm not suggesting that the insurance industry is among those in the position of discovering people with disabilities as uncharted territory - although I believe there is some new experience being charted, literally in actuarial experience and in the less predictable waters which underwriters often navigate, as expectations of and possibilities for people with disabilities expand.

Another reason I was happy to accept the invitation to be here today is because in the Human Rights and Equal Opportunity Commission's work under the Disability Discrimination Act we have always tried to recognize that our role in assisting industries to meet.their responsibilities is at least as important as our role in assisting people with disabilities to gain access to their rights.

But as I have already confessed, I was initially uncertain about what I should say here, because I wondered how to make remarks which were both relevant and to be relied on. Before you all get up and leave, I hasten to say that I did ending up deciding there are some important things I can discuss here today. However, in the spirit of full disclosure, let me share with you my initial uncertainties.

The Disability Discrimination Act has been in force for over seven years now, since 1993, making discrimination unlawful in insurance and in many other areas of life. Similar provisions of State anti -discrimination Acts have applied even longer in most cases, since the 1980s, even if these were found by the courts to have been excluded by Commonwealth coverage of the field so far as life insurance is concerned. So there is not very much new in saying, at greater or lesser length, that disability discrimination is unlawful and that your industry, like others, has obligations in this respect.

Essentially all of the Commission's work in administering the Disability Discrimination Act is disclosed for all to see on our website www.hreoc.gov.au. (When I say "for all to see", I do mean all. Internet publication delivers a revolution in information accessibility for blind and vision impaired people so long as some pretty basic rules on web design are followed. It has also enabled a small agency like HREOC to reach far more people than we ever could afford to relying on paper and other physical formats, and allowed us to make budget savings out of which my own position as Deputy Commissioner was funded.)

Our web site, then, contains summaries of complaint outcomes to date on insurance, answers to policy questions which have arisen, and guidelines on insurance developed some years ago in consultation with industry and consumer representatives. Far be it from me to deny the importance of access to information in whichever format the user requires or finds most effective. But I do not imagine you invited me here in the belief that it would be an efficient use of your time or taxes to have me recite to you what can be read on line at any time.

Where perhaps we reach more interesting issues is in considering what we have not published on line, because it does not yet exist. I mean, we have not published any definitive and detailed statement on what is and is not unlawful in the insurance area.

The legislation recognises that the nature of insurance is one of making differentiations based on risk - at least, that is the case outside of the health insurance area where the community rating principle applies. Even there, exclusions on payment for pre-existing conditions recognize that insurers are in the business of insuring against risks, not already known certainties. Of course, insurers are no more entitled than any other industry to act on basis of prejudices, misconceptions or inaccurate or outdated information about people with disabilities. But the Disability Discrimination Act does permit distinctions and exclusions based on disability if and where this is reasonable. Reasonableness can be established on the basis of actuarial data that is reasonable to rely on in the circumstances, or by reference to other relevant factors.

But this obviously does not answer the question: what is reasonable?

The Commission's insurance guidelines were issued in 1998 after extensive discussions with community and industry representatives and were intended to assist in decision making consistent with the legislation. Although these Guidelines were designed specifically to apply to the life insurance and superannuation industries, it was hoped that they would also assist providers of other types of insurance. We indicated when issuing the guidelines that the Commission would consider making guidelines to cover other types of insurance such as travel, credit card or mortgage insurance.

We know that these guidelines are being referred to - in that they are receiving about 60 hits per month on our internet site. Complaint outcome summaries on insurance cases are also receiving around 50 hits per month and the Frequently Asked Questions on insurance are receiving around 40 hits per month. But these statistics do not tell us who is referring to these materials or how useful they are being found to be.

A great deal of effort went into guidelines from all concerned, including the Commission's staff. But reading through them now, they seem to reduce fairly easily to two basic propositions: 1. Disability discrimination in insurance is unlawful. 2. Reasonable distinctions in insurance are not discriminatory for this purpose.

There has been little or no feedback on these guidelines since 1998 from either industry or community members although an invitation to provide comments and a commitment to consider these was published with the guidelines. I would encourage all interested parties to provide comments, including on these questions:

I mentioned a fair degree of interest in the complaint outcome summaries which we published on line last year and which will be updated from time to time. These summaries mostly reflect settlements which have been arrived at only on an individual basis and most definitely without admission of liability or setting of firm precedents.

This capacity to resolve the individual matter at hand without having to resolve once and for all the underlying legal and factual issues is clearly a strength of the conciliation process built into Australian anti-discrimination law, from the perspective of parties to any individual dispute. It is less of a strength if what is desired is clear definition of rights and responsibilities, or broader resolution of contentious policy issues.

The conciliation process, though, is not the only mechanism available under the Disability Discrimination Act. The legislation also provides for complaints to be investigated. It is not always recognised that investigation and inquiry processes can be also be effective and appropriate methods of alternative dispute resolution alongside mediation and conciliation approaches.

Investigation of discrimination complaints in Australia is generally confined to private discussion with the immediate parties to the complaint, but - subject to appropriate respect for privacy of personal information - there is no legislative restriction to this approach either in the Disability Discrimination Act or in other Australian anti-discrimination laws. In a small number of cases over the last year HREOC has begun applying a public inquiry process of investigation to complaints, mainly using the very cost effective approach of issuing a notice of inquiry and receiving and publishing submissions through the internet.

This method has been applied to complaints where

The purposes of a public process of investigation of a complaint are

We are yet to apply this approach to an insurance related complaint, but I anticipate that some insurance complaints would present issues appropriate for investigation in this way. I encourage insurance industry participants to consider this type of process as a positive opportunity for involvement in decision making under discrimination legislation, and not as a threat, or some sort of Spanish Inquisition.

An investigation, as I have noted, could provide the parties to the complaint with a suitable basis for an agreed resolution. It might alternatively lead to the conclusion that the conduct complained of is not in fact unlawful, or has been adequately remedied, or that there is another more appropriate remedy reasonably available, so that the Commission's handling of the matter should be terminated.

In the event of a termination decision, complainants retain the right to pursue the matter in the Federal Court if they wish. The Commission also has power to terminate investigation and attempted conciliation of a complaint precisely on the ground that the complaint raises a matter of public interest which ought to be considered by the Federal Court or by a Federal Magistrate.

Possibly, the insurance industry will be content to continue to rely on its own assessments of what is lawful decision making (assisted by non-binding guidelines from HREOC) to avoid complaints arising, to seek to conciliate complaints where they do arise, and to abide the risks of adverse results in possible Federal Court proceedings. This is an approach which is open to any industry in managing compliance with the Disability Discrimination Act.

If, however, members of the industry are interested in achieving a greater degree of certainty, the legislation does provide mechanisms for this. In particular, the Commission has the power to grant applications for temporary exemptions, for five years at a time, from most provisions of the legislation including those which apply to discrimination in insurance.

In keeping with general administrative law principles, the Commission will grant exemptions using this statutory power where it is satisfied that this would promote the objects of the legislation which confers the power. In the interests of accountability and sound decision making we conduct public processes of publishing notices of inquiry and taking and publishing submissions before making decisions on whether and in what terms to grant an application.

The temporary exemption process is an inherent part of the scheme of the Disability Discrimination Act and in my view has the potential to be more widely used than we have seen so far. The objects of the DDA are better served if organizations with responsibilities bring forward measures for meeting those responsibilities over time for consideration by HREOC and discussion with interested parties in the context of the exemption process than if those organizations elect instead to defer any positive action until successful complaint action is taken against them. The Commission will therefore continue to encourage organisations with responsibilities under the DDA to bring forward positive measures to meet those responsibilities in the context of temporary exemption applications under section 55, and grant exemptions where this advances the objects of the legislation.

The Commission has refused, in a number of decisions, to grant exemptions where there is no reasonable prospect of unlawful discrimination being found. This is because using the exemption power simply to certify that an action or situation is already lawful does not in itself do anything to advance the objects of the legislation. However, it is a proper use of the exemption process for an applicant to seek to convert a possibly good defence (including under the insurance exemption regarding reasonableness) into a certain defence by putting forward measures it is prepared to undertake to achieve greater compliance with the objectives of the DDA.

A number of exemptions have been granted to public transport operators on the basis of very concrete commitments, to percentages of vehicles and facilities to be accessible by certain dates, pending which the operators in return are given protection against complaints. In the insurance industry, this sort of concrete measure might be rather less applicable. More to the point might be an agreed approach to decision making, including the possibility that an exemption from the legislation might be granted to allow an industry based complaints system to prove itself if there were grounds to believe that such a system was capable of achieving better results in terms of the objects of the legislation than continuing to rely on the complaints machinery of the legislation itself through the Commission and the courts.

I am not saying that a system suitable for recognition through the exemption process is yet in place - for one thing, I understand that insurance industry based remedies are limited in their coverage to policy holders and do not extend to people whose problem is precisely that they were refused coverage. I believe though that this exemption based approach is worth discussion, in relation to insurance among other industries.

This sort of approach seems still to be regarded as uncharted territory and perhaps an excessively brave new world in most discrimination law circles in Australia , but it has been discussed extensively in the United States, particularly in relation to environmental law, under the name of "regulatory relief". I think that name could be misleading. The issue for the Commission is not one of industry being relieved of burdensome obligations, but of finding more effective and efficient ways for reasonable obligations to be fulfilled.

Before I conclude today I want to mention an issue which would much more generally be regarded as meriting the "brave new world" tag. I'm referring to issues of discrimination by insurers on the basis of genetic information.

A Genetic Privacy and Discrimination Bill proposed by the Australian Democrats party has recently (October 2000) received its second reading in the Senate after being the subject of a Legal and Constitutional Committee report in March 1999. The position appears to be that further consideration of any legislation in this area will be deferred pending an inquiry by the Australian Law Reform Commission and the National Health and Medical Research Council, announced by the Attorney General and the Minister for Health in August and for which terms of reference are expected to be released shortly. I expect that the Commission will be making a submission to that inquiry but I think it would be useful to note a few points today.

The Legal and Constitutional Committee report noted that in the context of risk assessment, genetic information is no different to any other type of information and for that reason, insurers believe they should have access to all relevant and available information that impacts on risk assessment. The report noted the proposed code of conduct for the insurance industry on the use of genetic testing, developed by the Investment and Financial Services Association. The main points of the code as I understand it are that insurance companies:

I would make two comments on this. First, as noted by the Committee, and unless I am missing subsequent developments, it is not clear what if anything happens if this code is not complied with. Second, these points seem to me to be all about privacy - in terms of how information will be acquired and how it will be protected from further transmission.

I am happy to leave to others, including the Privacy Commissioner and his staff, issues of what restrictions on access to genetic information are necessary, how counterproductive effects of any restrictions can be avoided, and how protection of information can best be made effective. My point is that these points do not seem to deal at all with issues of discrimination.

Now, it may be that the lack of specific provisions about genetic discrimination will not prove to be a problem. Certainly, the Legal and Constitutional Committee noted that the need for any specific legislation on genetic discrimination required further thought in the light of the fact that the Disability Discrimination Act already covers the issue - another one of those facts which I thought would be obvious fairly quickly to people interested in these issues but which seems to have been missing from some of the debate.

At the same time, there is clearly strong concern emerging about genetic discrimination, with references in the media to mergence of a disadvantaged or excluded "genetic underclass". Although issues of genetic discrimination raises images of Aldous Huxley's Brave New World in its most sinister sense, I have to say - at the risk of overworking my metaphor - that the newly discovered, uncharted territories of this harsh new continent, too, are ones where some of us have been living for a considerable time.

So one possible response from people with disabilities to concerns from people who do not have a disability yet but are worried by possible genetic discrimination on the basis of a disability they may develop in future would be a fairly unsympathetic "welcome to the club".

On a more principled level, I see no reason at this stage for a body administering the Disability Discrimination Act to give much support to legislative or industry based measures offering enhanced protection against genetic discrimination unless these measures also extend to people whose disability is not predicted but present, not hidden in the genes but experienced in daily life.

I think that a debate over genetic discrimination does offer an opportunity for a broader focus on what should be accepted as reasonable in the Australian community in relation to people with disabilities more generally. It is usually far easier to accept some disadvantage or exclusion from opportunity as reasonable when it happens only to "them" than when it reaches out to include "us". It may also offer some impetus to consideration of needs and possibilities for improved measures to define and protect rights and responsibilities in relation to disability discrimination and insurance.

Whatever the course and whatever the duration of the pending Australian Law Reform Commission inquiry on genetic issues, HREOC's door is open now to industry and other interested parties for discussion, and decisions, on options available right now under the Disability Discrimination Act.

As part of the request for this presentation I was asked to prepare a set of problems for discussion in your workshops. If you were hoping that I would provide the answers to those problems in this presentation then you have been sadly disappointed. What I have tried to do is raise some broader issues for industry consideration, which is far more the role - in my view - of conferences such as this. However, if as insurance explorers you are feeling lost in this new continent of disability all of the navigation information which we have - which doesn't provide all the answers but does give much information - is on our website. So go to your workshop armed with your laptops and internet connections.