Industry funds and group insurance rebates
Industry superannuation funds have a number of options and models they can pursue to deal with cost pressures around group insurance, including rebates.
The Conference of Major Superannuation Funds (CMSF) has been told by CHR Consulting principal, Jeff Humphreys, that the events of 2013 have seen superannuation funds contemplating a range of different models including, for some, self-insurance.
However, it is the rebate model, outlined to the conference, which will cause some discussion amongst financial planners who only a few years ago saw dealer group models forced to change due to the outlawing of volume rebates as part of the Future of Financial Advice (FOFA) changes.
The difference, as outlined by Humphreys is that a premium rebate is paid on the basis of better than expected performance.
He also outlined new group structures predicated on multiple re-insurers and funds having direct relationships with both the insurer and the reinsurer.
Humphreys said that notwithstanding the recovery of insurer profitability since 2013, the group insurance market remained inefficient with too few re-insurers and a requirement on funds to offer death and disability insurance.
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