The Australian Prudential Regulation Authority (APRA) has moved independently of the Insurance in Superannuation Working Group (ISWG) to outline measures to compel superannuation funds to make it easier for members to opt out of insurance.
The regulator has flagged the imposition of a specific prudential standard as part of a consultation package which it said was aimed at assisting APRA-regulated superannuation licensees to be better positioned to deliver sound outcomes for their members.
The discussion paper acknowledged the work of the ISWG but made clear that APRA was proposing to amend Prudential Standard SPS 250 Insurance in Superannuation “to require an RSE licensee to provide simple and straightforward processes for opting out of all insurance products”.
In dealing with current arrangements, the APRA paper said the regulator had “observed a wide range of opt-out processes across the industry and supports the Government’s expectation that opt-out processes permit fund members to implement decisions about their insurance cover in a timely manner”.
Dealing with the proposed amendments to SPS250, APRA said the proposals sought to improve opt-out processes across the industry and align them with the Government’s expectation that opt-out processes enabled fund members to implement decisions about their insurance cover in a simple and straight-forward manner.
The industry has until 29 March, next year, to respond to APRA’s proposals with the regulator stating it expected to release its final requirements in mid-2018 with a view to them coming into effect from 1 January, 2019.
