ASIC flags issues with group life

The Australian Securities and Investments Commission (ASIC) has confirmed it has initiated a project which will closely examine life insurance within superannuation.

The regulator has flagged that it intends on publishing a report on life insurance within superannuation “fairly soon” outlining issues it had detected in the sector.

ASIC deputy chairman, Peter Kell has told the Parliamentary Joint Committee on Corporations and Financial Services that the regulator’s examination of the group insurance space represented a flow through from ASIC’s earlier work on claims handling within both the advised and directed life insurance channels.

“…we are also undertaking work looking at the quality of information for consumers and outcomes for consumers in the life-insurance-through-super channel,” he said. “The group channel.”

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Kell said ASIC was working with the Australian Prudential Regulation Authority (APRA) on the issue, noting that “there is also a lot of work going on in the industry because there are some well-recognised problems, such as some of the ways that young people who are entering the workforce andend up paying a lot in premiums when they have relatively low super balances and so on”.