Insurance Outcomes Set to Improve – ASIC Demands Action from Superannuation Trustees

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Australian Securities and Investments Commission (ASIC) has requested superannuation trustees to prioritise enhancing life insurance results for their members in Australia.

Superannuation trustees are responsible for determining the life insurance options available and their delivery to their members, as ASIC Commissioner Danielle Press highlighted.

“Millions of Australians have access to insurance through their superannuation, which acts as a safety net,” Press said. 

“We aim to ensure that fund members know the value of the insurance included in their super, whether it is default or optional. We aim for them to have confidence in making claims when necessary.”

“Trustees are in a good position to recognise and prevent potential problems, such as instances where members are unable to make an insurance claim when they need to despite paying for it.”

“They determine the design and delivery of insurance in superannuation for their members,” Press said. “Although some trustees in our review have improved their insurance arrangements, there is inconsistency in the level of progress across the industry.”

ASIC sent a letter to every trustee who participated in the review, giving them specific feedback on areas that need improvement.

“I urge all trustees to carefully analyse their insurance arrangements with the help of ASIC’s report, utilising the information and action points provided to identify deficiencies and take corrective measures. Additionally, life insurers should work in partnership with trustees to make any improvements,” Press said.

“Trustees should ensure they have robust systems, processes, and controls to manage their insurance plans effectively. If they don’t, they risk hurting any progress they make towards improving benefits for their members.”

“All trustee boards should read and understand the report, use it as a learning opportunity, and take necessary steps to improve member outcomes.”

ASIC will continue to monitor trustees’ progress in improving life insurance outcomes and is committed to ensuring members receive the total value of their insurance entitlements.

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