AFCA blames Govt policy, not funds on insurance inside super increases

superannuation AFCA life insurance protecting your super Putting Members’ Interests First

18 August 2020
| By Mike |
expand image

The Australian Financial Complaints Authority (AFCA) has confirmed an upsurge in complaints around large premium increases impacting insurance inside superannuation but is blaming Government policy rather than superannuation funds.

In a bulletin issued this week, AFCA said it was receiving more complaints than usual about large insurance premium increases because of the Government’s Protecting Your Super changes and noted that it was expecting that the Government’s Putting Members’ Interests First changes would have a similar impact.

“The recent Protecting Your Super (PYS) and Putting Members’ Interests First (PMIF) changes have led to a decrease in the number of people who have insurance through their superannuation. This in turn has led to insurers reviewing their group insurance arrangements, including the premiums,” it said. “For example, PYS changes introduced the requirement for insurance to be ‘opt in’ for inactive superannuation members.”

“AFCA is receiving more complaints than usual about large insurance premium increases because of PYS changes, and PMIF changes might have the same impact.”

“We think this increase in premiums is because the number of insured members is smaller (among whom risk can be spread) and not because of trustees failing to properly insure their members. This issue is affecting both industry and retail superannuation funds,” the AFCA bulletin said.

The complaints authority said it had limited powers with respect to dealing with complaints about premium increases but would be looking at the manner in which superannuation trustees handled informing their members.

Read more about:


Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry



Old Fella

Of course a survey commissioned by an adviser coaching business would find that having an external business coach is a k...

15 hours 55 minutes ago
One foot out the door

A financial planner is expected to earn between $95,000 and $120,000 per year, depending on the state. Really? I don't...

1 day 1 hour ago

The whole thing is a bit frightening especially the last note where notes on what might be done could result in the need...

1 day 22 hours ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

1 week 6 days ago

A former financial adviser has been banned by ASIC from providing financial services for inappropriate advice, among multiple breaches....

4 weeks ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

1 week ago