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APRA cautions on price-driven insurance decisions
The Australian Prudential Regulation Authority (APRA) has cautioned superannuation trustees on selecting insurance based purely on price and against embarking too readily on internalising investment functions.
APRA member Helen Rowell sent the cautionary messages during the Association of Superannuation Funds of Australia conference in Perth, where she said trustee boards needed to think carefully about the insurance offerings they took to their members and whether what was ultimately delivered was appropriate.
"Trustee boards need to think carefully about what they are offering and their decisions should not be purely price-driven," she said.
Rowell said that, instead, trustees should be considering flexibility, choice and outcomes for members.
Commenting on the increasing number of super funds who had in-sourced elements of their investment process, Rowell said it was not a move that should be undertaken lightly and that APRA was concerned that the funds held the appropriate resourcing and expertise to undertake the role.
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