Corporate superannuation specialists providing insurance services to employer groups should be able to charge an insurance service fee, according to the Corporate Super Specialist Alliance (CSSA) submission on draft MySuper legislation.
CSSA President Douglas Latto said while the CSSA recognises commissions should not be included in a premium when no service is being delivered, if corporate super specialists cannot be effectively remunerated then members of corporate super funds would lose the services they provide — services such as negotiating reduced premiums; help with paperwork and ensuring they aren’t subject to automatic acceptance levels.
“We suggest that an explicit insurance service fee, which defaults to zero, be charged to all members at an agreed percentage with the consent of the employer,” Latto said.
“This is specifically relevant when a tailored default insurance strategy is selected by the employer — rather than the standard default strategy.”
Latto said the insurance service fee could operate within group insurance in the same way that asset-based fees operate within investment and superannuation, ensuring only those receiving insurance services pay the fee.
Group insurance is a better solution for members, because it offers lower costs and more tailored features than a series of individual contracts, he said.
“It makes no sense that payment for providing services associated with insurance to members can only be made from the least efficient solution,” he said.
