ASIC has published REP 760 Insurance in superannuation: Industry progress on delivering better outcomes for members which examines progress by superannuation trustees to improve their arrangements for life insurance they provide their members.

In 2022, ASIC undertook a review to examine actions taken by a sample of 15 superannuation trustees to address consumer harm in life insurance (death cover, total and permanent disability (TPD) cover and income protection (IP) cover) in superannuation, focussing on: insurance that unnecessarily erodes a member’s retirement balance because they are paying for insurance that does not meet their needs, lack of cover in the event of a member becoming disabled due to restrictive definitions and exclusions, and onerous and lengthy claims handling processes.

ASIC’s review found:

• many trustees have made changes to the design of their insurance arrangements to better meet member needs and provide value for money, such as by changing restrictive ‘total and permanent disability’ definitions;
• many trustees have worked with their insurers to streamline their claims processes to make them easier for members to navigate, and taken steps to enhance their oversight of insurers’ claims handling practices; and
• some trustees have improved the way they explain their insurance offerings to make it easier for members to understand their insurance and make appropriate decisions for their circumstances.

ASIC concludes that trustees could make improvements by:

• using real-time data better to monitor member outcomes and to proactively identify how to better meet members’ needs and provide value for money;
• designing and delivering better claims processes to improve their members’ experience;
• embedding a process to continuously improve their member communication and processes to make it easier for members to understand their insurance cover; and
• ensuring they have robust and fit-for-purpose systems, processes and controls to effectively manage how insurance is provided.

If you found this article helpful, then subscribe to our news emails to keep up to date and look at our video courses for in-depth training. Use the search box at the top right of this page or the categories list on the right hand side of this page to check for other articles on the same or related matters.

Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.