The Australian Securities and Investments Commission (ASIC) continues to push the superannuation industry to lift its game across insurance, with the regulator urging the sector not to leave the vulnerable behind.
To this end, ASIC has released a report on the superannuation industry’s progress in improving consumer outcomes in relation to life insurance provided through superannuation, that is held by approximately 12m Australians. It covers the industry’s implementation of the Insurance in Superannuation Voluntary Code of Practice that was introduced on 1 July 2018.
The Code sets standards of practice with the aim of improving industry practices in benefit design, claims handling and communications to members. 70% of superannuation trustees are adopting the Code in whole or part but full implementation is not due for completion until 30 June 2021.
ASIC commissioner Danielle Press said, “We recognise that there is significant change occurring in relation to insurance in superannuation. In this dynamic phase, it is important that superannuation trustees remain focused and committed to improving outcomes for members.”
In the report, ASIC observes that some improvements in practices are being introduced as a result of adoption of the Code by a significant number of trustees. However, further work needs to be done to achieve the high industry standards consumers expect.
“We identified a number of inconsistencies in implementation of the Code, some relating to fundamental aspects such as which members are covered by the Code, the controls around balance erosion, and calculation of timeframes for claims processes. Also, trustees are continuing to leave vulnerable members behind – they need to have better defined policies and processes for those with unique needs,” Ms Press said.
ASIC also plans further work looking at issues relevant to consumer outcomes in relation to insurance in superannuation.