Important Update on Life Insurance Code of Conduct
On 2 November 2016 it was announced that an Insurance in Superannuation Industry Working Group has been formed. The group has been developed by Australia’s superannuation industry bodies, the Australian Institute of Superannuation Trustees (AIST), the Association of Superannuation Funds of Australia (ASFA), the Financial Services Council (FSC), the Industry Funds Forum (IFF) and Industry Super Australia (ISA). This is a positive move and a recognition that the superannuation industry is a key player in the life insurance market.
The existing Life Insurance Code of Conduct released in October 2016 does not bind superannuation trustees and it is hoped that this working group will develop a further iteration of that code to rectify that problem.
The intent is that representatives from superannuation funds, insurers, consumer groups and industry bodies will be involved in the working group. The group is to develop new standards for trustees and insurers that will set the benchmark for industry practice with respect to insurance in superannuation. The group’s aim is to finalise a further code of practice to be binding, enforceable and to contain mechanisms for independent administration and monitoring to enhance consumer protections by the end of 2017.
The industry is to be commended on its actions in forming the working group and it is hoped that the development of proper benchmarking for the insurance industry in superannuation will enable an easier and more efficient claims experience for injured members moving forward.