FSC introduces life insurance standard in super
The Financial Services Council (FSC) has commenced operation of an enforceable standard for handling group life insurance claims in superannuation.
This set out the minimum level of service that consumers should expect from their super fund when making a life insurance claim.
The standard was operating on a voluntary compliance basis from 1 January and full mandatory compliance would commence from 1 July, 2023.
It applied to FSC’s super members who were trustees holding a public offer or extended public offer license to operate a Registerable Superannuation Entity (RSE) under the provisions of the Superannuation Industry (Supervision) Act 1993.
It included consumer-focused commitments for trustees to help their members navigate through the claims process, including:
- To assist a member in making a claim by helping them to complete the form with any supporting information, carrying out an initial eligibility assessment and providing the member with a summary of the claims process;
- To ensure that life insurers only ask for the evidence that they reasonably need to assess a claim and, if asked by a member, to explain to the member the relevance of any information request;
- To ensure the claims assessment process is as timely, transparent and straightforward as possible by proactively overseeing the conduct of the life insurer and any service providers involved, and keeping the member regularly updated on the progress of their claim until a decision has been made;
- To abide by standard timeframes when pursuing a claim on behalf of a member, and in situations where exceptional circumstances apply to ensure that the trustee continues to provide regular updates to the member until a claim decision is made;
- To carry out a review of a life insurer’s decision not to pay a claim to determine whether it agrees with the life insurer’s decision and to advocate on the member’s behalf if it believes the claim has a reasonable prospect of success;
- To ensure that accepted claims are paid promptly to the member once the trustee confirms that the member has met the relevant requirements for the claim proceeds to be released from their superannuation account; and
- To provide the member with details of the complaint process if the trustee informs the member they are not eligible to make a claim, the claims assessment falls into exceptional circumstances or if the claim is declined.
AUTHOR
Laura Dew
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Whilst this is good news especially that the code is starting to become enforceable which was an issue raised at the Royal Commission it could sadly become irrelevant soon. The TAL and AIA CEO's have created CALI and got the backing of the other insurers. A CALI source confessed to the afr that CALI want to take back control of the code. Lets not be naive and believe the spin that CALI is about having one Life insurance voice. Its very much about the insurance companies taking back control of what they can and cant do in claims and products and ensuring very little customer benefit will be enforceable. Lets not be naive!