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Trustees warned on insurance obligations
The Superannuation Complaints Tribunal (SCT) has warned superannuation trustees of the consequences of allowing insurance companies to contact members directly about the status of claims.
In its latest quarterly bulletin the SCT makes clear that trustees need to take responsibility for the actions of their insurers.
"Some funds allow the insurer to communicate directly with members on insurance issues, particularly in relation to income protection/salary continuance claims," the tribunal said. "This can cause confusion for members in the event of a dispute, particularly if it is not clear that the insurer is also acting on behalf of a trustee.
"In a number of instances recently, insurers have been communicating decisions about insurance cover or benefits directly to superannuation fund members and advising them that if they are not happy with a decision, they can complain to the tribunal," the bulletin said.
"This is not an issue if it is clear to the member that the insurer is acting on behalf of the trustee or that the trustee will have to review the insurer's decision and make its own decision before advising the member," it said.
"However, it can lead the member to complain to the insurer instead of the trustee. In the event of a subsequent complaint to the tribunal from a decision of an insurer that is not in fact acting as the trustee, the tribunal will not have jurisdiction."
The SCT Bulletin said this could cause delays and frustration for members, particularly if the trustee was unaware that a complaint had been made.
AUTHOR
Mike Taylor
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