The Financial Services Council (FSC) has released its enforceable standard to remove occupational exclusions and occupation based restrictive disability definitions in default life insurance cover in superannuation.
FSC chief executive, Sally Loane, said the stapling of super funds would lead to some consumers being unable to claim on their life insurance as their fund had occupational exclusions and occupation based restrictive disability definitions in the default cover they offered to their members.
The enforceable standard would take effect from 1 January, 2023, following a one-year transition period, and applied to both FSC super and life insurance members.
“The standard will remove 87% of all occupational exclusions and occupation based restrictive disability definitions that currently exist in the industry by 1 January, 2023,” Loane said.
“An obligation on life insurers to not offer occupational exclusions and occupation based restrictive disability definitions to any superannuation trustees, together with ongoing consolidation in the superannuation sector and a powerful new industry norm is expected to see the remaining use of these terms removed in the near term.
“This standard demonstrates that when policy settings change, the life insurance and superannuation sectors will take proactive steps to protect consumers. The FSC is very pleased to be working with our members to deliver on this goal.”
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