AMP has received more than 440 customer requests to reinstate insurance cancelled as a result of the Government’s Protecting Your Superannuation legislation and it is warning the situation could get worse if the Government does not delay the implementation of further legislation impact insurance inside superannuation.
AMP also revealed that more than 5,000 of its superannuation customers with inactive accounts under the new Protecting Your Super rules and with balances less than $6,000 had elected to retain their insurance.
In a submission filed with the Senate Economics Legislation committee, AMP said the proposed 1 October 2019 commencement date for the new legislation – the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019 did not provide sufficient time for customers impacted by the low balance account measure to comprehend the impact of the changes or consider their circumstances.
“Based on customer responses to engagement in respect of the PYS changes, AMP does not believe sufficient time was provided for customers with inactive accounts to comprehend the impact of the changes, consider their circumstances and make an informed decision about whether to keep their insurance, before it was cancelled from 1 July 2019,” it said.
“Despite the considerable effort AMP made to communicate the PYS changes to our customers, and the combined efforts the industry made to raise awareness before and after 1 May 2019, as at 15 July 2019 we have received more than 440 customer requests to reinstate insurance cancelled as a result of PYS.
“This was a significant increase from the first week, where on 8 July we had received 47 customer requests for insurance reinstatement,” AMP said.
“We anticipate the number of insurance reinstatement requests to continue to increase as customers receive insurance cancellation notices.
“Based on the customer experience and response to the PYS changes which allowed for two months’ notice prior to cancellation, we believe that longer than two months’ prior notice is required to ensure customers with low balance accounts are not adversely impacted by the proposed PMIF changes.”