The Australian Securities and Investments Commission (ASIC) has imposed additional licence conditions on the Australian financial services (AFS) licence of NAB's superannuation trustee, NULIS Nominees (Australia) Limited, following breakdowns in internal procedures.
The regulator said the conditions require NULIS to engage an ASIC-approved independent expert to assess and report on the adequacy of its compliance and risk management practices for its retail and wrap superannuation funds.
It said NULIS had agreed to the conditions, and KPMG had been appointed as the independent expert.
The ASIC announcement said the conditions were imposed on NULIS following ASIC's enquiries into a breach report lodged by NAB's wealth entities.
It said the breaches involved a breakdown in risk management and communication procedures following the transfer in 2012 and 2013 of all members in a number of products to MLC MasterKey Business Super (MKBS) and MLC MasterKey Personal Super (MKPS), as well as changes made to the death and total and permanent disability (TPD) insurance of MKBS and MKPS members.
ASIC said approximately 400,000 members were impacted by the insurance changes.
Commenting on the ASIC announcement, NAB acting executive general manager, wealth product, Garry Mulcahy confirmed a total of $34.7 million will be paid to approximately 220,000 customer accounts, with the average compensation amount per customer account expected to be approximately $150. In addition, we have identified ten customers in the MasterKey Business Super and Masterkey Personal Super products that were impacted when we upgraded their life insurance benefits in 2013.
He said that while approximately 400,000 customers were provided access to improved life insurance through this 2013 change, 10 customers had claims incorrectly declined and we've paid $1.8 million in additional insurance benefits to these customers.
"Our focus has been to do the right thing by our customers," he said.