FSC releases occupational exclusion prohibition standard
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.”
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
