Insurance In Superannuation Working Group Releases Draft Life Insurance Code of Conduct
The insurance in superannuation working group (ISWG) has now released a draft Life Insurance Code of Conduct which will bind superannuation trustees. The code is a marked improvement on the life insurer’s code developed by the Financial Services Council (FSC) and is much broader in its scope. It will operate in partnership with the FSC code. This draft code is another attempt by the financial services industry to respond to the many complaints about the handling of claims by insurers and superannuation trustees in recent times.
The code is proposed to deal with benefit design, premium limits, cancellation and cessation of coverage, duplicate insurance coverage and claims handling. The code is proposed to provide a framework for independent monitoring of code compliance. Ultimately it is hoped that the code will be sanctioned by ASIC and enforceable as a result. The code requires that trustees of superannuation funds ensure that all of their staff and any independent service providers they engage also comply with the code. It is proposed that the code will commence on 1 July 2018 with a transition period up to 30 June 2019 for superannuation trustees to adopt the code.
Submissions have now closed for consultation in relation to the code and it is intended that the final code will be approved and published by the end of 2017.
In the meantime claimants who are pursuing insurance benefits through superannuation can use the draft code as a benchmark for the levels of service they should expect from their superannuation trustee. If a trustee is not meeting these standards then a legitimate complaint could be made about the progress of a claim and claimants would be well advised to seek legal advice to try and enforce their entitlements in those circumstances.