The Parliamentary Joint Committee (PJC) Life Insurance Inquiry report, released yesterday, reinforces the importance of the Insurance in Superannuation Voluntary Code of Practice, according to the Association of Superannuation Funds of Australia (ASFA).
The Association said that the report highlighted the role of the Code in improving standards for consumers.
ASFA chief executive, Martin Fahy, said that the Code would ensure that super fund members received appropriate levels of life and disability insurance. It would also protect them from the unnecessary loss of retirement savings.
“The industry Code requires funds to cease cover for people at greatest risk of unnecessary erosion of their account balances. It [also] requires funds to cease cover for people at greatest risk of unnecessary erosion of their account balances,” Fahy said.
He said that in some instances, the Code actually imposed higher standards than those proposed in the PJC report.
ASFA anticipated that most super members would be protected by the Code, with super funds responsible for more than 70 per cent of MySuper members having already adopted it.
It predicted that a further 15 per cent of MySuper members would be covered by the Code’s 1 July, 2018 start date.
Fahy said that the Association would look further into the report’s recommendations beyond those related to the Code.
“ASFA will be closely considering other recommendations in the PJC report and looks forward to ongoing dialogue with the PJC and Government on these issues.”