Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

APRA finalises prudential framework for insurance in superannuation

APRA/Royal-Commission/insurance-in-superannuation/

15 November 2021
| By Liam Cormican |
image
image image
expand image

The Australian Prudential Regulation Authority (APRA) has finalised revisions to requirements and guidance relating to insurance in superannuation following two years of industry consultation.

APRA said the finalised works would fulfill recommendations 4.14 and 4.15 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and that it had now met all 10 recommendations that was directed to it.

The final revisions to Prudential Standard SPS 250 Insurance in Superannuation (SPS 250) and the accompanying Prudential Practice Guide SPG 250 Insurance in Superannuation (SPG 250) were aimed at ensuring better member outcomes through updated requirements for trustees to select, manage and monitor members’ insurance arrangements, said APRA.

The newly released paper confirmed that SPS 250 would require trustees to:

  • Strengthen arrangements to protect members from potential adverse outcomes caused by conflicted life insurance arrangements – including robust decision-making in the negotiation and ongoing review of insurance arrangements;
  • Obtain an independent certification of related party insurance arrangements before entering into, or materially altering, an insurance arrangement, and on a triennial basis; and
  • Strengthen data management to improve analysis of member outcomes across different groups of super fund members.

APRA said: “Further, enhanced prudential guidance in SPG 250 would facilitate easy opt-out of insurance for members, and ensure premiums did not unduly erode members’ retirement incomes”.

The enhancements to SPS 250 would commence on 1 July, 2022.

APRA encouraged trustees to reassess their insurance arrangements and strategy, risk and compliance frameworks in preparation for this date.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 1 day ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 3 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 3 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

2 weeks 5 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND