Insurance in super code must be binding

Any code of conduct covering insurance inside superannuation needs to be enforceable on superannuation funds and insurers from the get-go, according to plaintiff law firm Maurice Blackburn.

Maurice Blackburn principal, Josh Mennen warned against any watering down stating it was essential that the Insurance in Superannuation Working Group (ISWG) guaranteed that all parties, including trustees, were bound by the final code of conduct.

“The ISWG appear to be considering watering down the crucial objective that all trustees of regulated super funds be bound by the code from inception,” he said and noted reported comments that the final code might not be enforceable to begin with.

Related News:

“To the extent that the concerns raised in submissions have merit, they can and should be resolved to ensure that all trustees are on board when the code comes into force in 2018,” Mennen said.

The law firm cautioned against the ISWG allowing concerns about conflicts between the code and the provisions of the Superannuation Industry (Supervision) Act being allowed to substantially erode the value of the code.

“The ISWG process must ensure any final code from the get-go has teeth or it risks having all the bite of a month-old lettuce. It must be enforceable with regulatory oversight and binding,” Mennen said.

“For the ISWG to concede that it is comfortable with releasing a final code that might ‘start non-binding’ and that if ‘enough sign up from the outset it will become the industry standard’ undermines the basic objective of an enforceable code of conduct,” he said.

Related Content

ASIC not expecting to enforce codes

Substantial doubt still surrounds how the various codes of conduct applying to the financial planning and insurance industries will be enforced, with ...more

Insurers face low planner retention rates

Insurer switching levels have reached all-time highs among planners, highlighting the need for retention, according to Investment Trends.The 2017 Plan...more

BEAR will make bank wealth and insurance uncompetitive

Including wealth management and insurance operations within the terms of the Bank Executive Accountability Regime (BEAR) will hamper their ability to ...more



Add new comment