Privacy Commissioner warns insurers over medical records

Commissioner Marie Shroff said doctors were only obliged to pass on information that was "necessary to make insurance decisions," and that insurers could open themselves up to breaching privacy rules if they collect information that isn't essential to their enquiries. In saying that, Shroff also stressed clients need to be "upfront and honest" with insurers about their medical history.

Investment Savings and Insurance Association chief executive Vance Arkinstall said the new rules won't change things too much, but could cause costly delays. The onus will be on both insurers and doctors to comply with the Commissioner's report.

"It will slow down the processing of business and may see the cost to industry and to the doctors rise," he said.

While it's still early days, insurers are waiting to see how the decision will play out, and it may be complicated with electronic medical reports improving the availability of information for insurers, according to Milton Jennings, chief executive of Fidelity Life.