The Insurance in Superannuation Voluntary Code of Practice will help life insurance cover to be better understood and set improved expectations around contributions and premiums, said the Insurance in Superannuation Working Group (ISWG) of its release today.
ISWG chair Jim Minto said the voluntary Code, which would come into effect from 1 July 2018, would improved super member value and protections and help build awareness around insurance inside super, which has been cited as a continuting issue.
According to a joint release from ISWG and the Association of Super Funds of Australia (ASFA), included in the release of the Code today was:
- A framework to set expectations about the maximum amount of superannuation contributions that should be used for automatically provided life insurance premiums
- Simpler processes for members to opt out of automatic life insurance
- Simplified disclosure and improved superannuation fund member communications about insurance
- Requirements to reduce multiple insurance policies by cancellation of some insurance cover, after funds contact members, in cases where member accounts are inactive and insurance exists
- Provision of better and more timely assistance to members during claims
- Standards for handling of premium adjustment amounts between insurers and trustees
- Requirements for trustees to publish plans for the Code implementation and when various aspects of it will be implemented.
“This Code helps automatic insurance function even better for members, as well as providing enhanced protections where members have decided to acquire ‘opt in’ life insurance cover through superannuation,” Minto said.
“It delivers enormous benefits without underwriting and must be preserved as a unique aspect of our superannuation system.”