The Australian Securities and Investments Commission (ASIC) has placed superannuation funds on notice to be careful in their member communications around the Government’s new Putting Members Interests First legislation which will make insurance inside superannuation opt-in for low-balance members.
The regulator has suggested that superannuation funds need to tell members when opting out of insurance might be in their best interests.
The message is contained in a letter written by ASIC to superannuation funds this week.
The regulator has claimed that a review it conducted of superannuation fund communications around the Government’s early Protecting Your Superannuation Package (PSYP) reforms were not always balanced in providing members with all available options open to them, including the reason why ceasing insurance might be appropriate.
“ASIC expects trustees to follow ASIC’s guidance, based on its initial review of the PYSP communications, in designing their communications from now on. Communication with members about important matters, such as their insurance, should not be dismissed as a ‘mere exercise in compliance.’ Trustees need to act to help their members understand what the reform means for the member,” it said.