Director Carly Dober spoke with Triple J's Hack program in response to an ABC story about a young woman who was denied life insurance due to her mental health issues.
"We would love to see some regulation and oversight and have some transparency about how they are making these decisions, what data and information they are accessing to make these decisions because we know with the right support, anyone can get better," she said.
Carly said insurers are letting young Australians down.
"The message that has sunk through really well with this generation is if you need support, go and get it. Talk about it. You aren't alone and then you've got big businesses or insurance companies saying, 'well, if you do talk about it or you do get help, you will be penalised for it'. So it's very different that there's a social appetite for change, but legislation and organisations like this have not stayed current."
Executive Director Tegan Carrison said in a statement to the ABC in response: "People should not be penalised for seeking help for their mental health issues. We cannot, in one breath, encourage people to seek out help when they need it and in the next breath, have legislation in place to penalise them for doing so.
"As a country, we have worked hard to reduce the persistent, needless stigma around mental health care, and this is a backwards step.
"It is preposterous to assert that people who seek help, who do the work and recover, are a ‘higher risk’ to insurers than those who, for a myriad of reasons, do not seek help and suffer in silence."
Listen to the full interview here.