The insurance in superannuation code of practice is likely to be overseen by a Code Compliance Committee with audit and sanction powers, according to a submission filed with the Productivity Commission (PC).
The submission filed by the Consumer Action Law Centre, Berrill & Watson Lawyers, and the Chronic Illness Alliance appears to reflect the current thinking of some members of the Insurance Inside Super Working Group (ISWG).
The submission, filed with the PC last week, has defended the value of insurance inside superannuation and the importance of the work being done by the ISWG and stated that “the insurance in superannuation code is being developed with consumer input and will, in all likelihood, be overseen by a Code Compliance Committee with audit and sanction powers”.
The submission said premium caps, account consolidation, standard definitions, and avoidance of duplicate insurance cover represented the key elements of reforms the ISWG was undertaking with particular attention being given to making it easier for fund members to vary, reduce or opt out of their default insurance.
“Some superannuation funds have been criticised for inefficient and cumbersome procedures for the variation or cancellation of insurance cover,” it said. “Streamlined and seamless electronic mechanisms to accommodate member choice is an important piece of the ISWG’s work.”
The submission said that this, taken together with enhanced member education, information sharing and a superannuation and insurance code of practice to deal with sales, claims and complaints meant the ISWG’s work represented the largest suite of reforms to insurance in superannuation ever undertaken in Australia.
