ASIC finds fault with insurance inside super
Superannuation funds and insurers have been placed on notice by the Australian Securities and Investments Commission (ASIC) that they need to pick up their act particularly around complaints handling.
ASIC has released a report on the provision of insurance within superannuation and declared that it was concerned about poor complaints-handling timeframes and practices, with almost a third of trustees taking more than 90 days on average to resolve complaints about insurance in 2017-18.
As well, it said some trustees were still automatically defaulting members as ‘smokers’ when transferring them to different sections of the same fund, resulting in higher insurance premiums payable by those members.
It noted that all trustees had agreed to discontinue this practice.
Commenting on the report, ASIC deputy chairman, Peter Kell said that while some improvements were being introduced by trustees, there was considerable work to do to raise standards in the areas covered by the review.
“In the coming months, ASIC will be focused on ensuring that members do not experience adverse outcomes arising from poor complaints handling or inappropriate defaults. It is essential that trustees meet their obligations to deal with consumer complaints about superannuation in a timely manner and provide reasons for decisions as required,” Kell said.
He said ASIC would be consulting on stronger internal dispute resolution requirements for superannuation after the Australian Financial Complaints Authority (AFCA) commenced operations in November.
“This will require greater transparency about complaints handling performance by superannuation funds,” the ASIC announcement said.
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