AMP Limited has sought to rebut claims made in the Royal Commission that it engaged in misconduct over its handling of superannuation fund members accounts after they had died, claiming it acted appropriately and in line with policy.
It said that AMP’s policy at all times had been that the liability to pay premiums on life insurance policy ceased on the date of death.
However, it said that AMP was reliant on a member’s estate contacting it to inform it of a member’s death.
“Often, this notification process is not instantaneous and it may be that AMP is unaware of a member’s death for some time. It is for this reason alone that premiums are deducted after the date of a member’s death, and a refund process is required,” the AMP submission said.
It said this outcome was inevitable and the process that AMP followed was appropriate.
The submission said AMP currently implements its policy as follows:
(a) AMP ensures premiums cease to be deducted as from the date of the initial and informal notification of death;
(b) the deceased member’s investment is switched to cash where applicable to ensure that their superannuation account is not significantly impacted by market fluctuations; and
(c) AMP reverses any premiums, which were paid after the date of death and prior to AMP being notified of the death, to the superannuation account before any amount is made available to the beneficiary. The reversal process to effect this payment results in the member’s account being put in a position as though the premium payments after the date of death had not occurred, and accounts for the time value of money (that is, any investment gains or losses or interest, as applicable).