105-day delay on TPD claim ‘unreasonable’

A recent Superannuation Complaints Tribunal (SCT) determination has reminded superannuation funds and insurers of the costs attaching to unreasonable delays in meeting member claims.

The SCT imposed significant remedial penalties on both the insurer when it was revealed that the insurer at first provided the wrong total and permanent disability (TPD) claims forms to a fund member (a doctor) and his doctor and then took a further 105 days to send the correct form.

The SCT found, in determination D16-17\135, that the 105-day delay resulted in unnecessary delays in the insurer’s consideration of the claim and that its later decision not to pay interest on the claim moneys during the period of that delay was unfair and unreasonable.

It found that the interest was payable by the insurer because the complainant had not had the benefit of the money in the interim.

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The complainant fund member had originally sought $85,000 in compensation for costs associated with issue but amended this downward to $43,353.72. In the event, the tribunal did not support payment of the compensation.

While the insurer was obliged to pay interest over the period the complainant did not have use of the moneys, the superannuation fund was ordered to pay interest at the fund’s cash rate for any period the amount remained in the fund prior to payment made to the trustee.

The SCT determination revealed that, ultimately, the complainant’s benefit was rolled into a self-managed superannuation fund (SMSF).