March 13, 2018
The deputy chair of the life insurance regulator has called on superannuation trustees to adopt the Insurance in Super Working Group (ISWG) Code of Practice well ahead of its 2021 final adoption date.
Addressing the Superannuation Committee of the Law Council of Australia last week, APRA Deputy Chair, Helen Rowell said the Code as it currently stands sets minimum benchmarks relevant to insurance management within superannuation but more remained to be done.
“There is more to do, both to strengthen the enforceability and oversight of the Code and also to tackle some of the areas that the current Code has not fully addressed,” Rowell said.
“These include looking at opportunities to clarify and standardise definitions for disability insurance, and dealing more fully with multiple accounts and unnecessary multiple insurance cover,” she added.
“We would also encourage you to think about where you should go further than the minimum provisions set out in the Code…
Rowell said addressing the problems identified inside and outside the Code “…will require a concerted effort by the industry working in partnership with the life insurance industry” and would avoid the type of reputation damage for the superannuation sector that had taken place in the life insurance industry.
“APRA therefore encourages all trustees to consider adopting the Code, and to review their insurance arrangements against its provisions – and where possible to do so more quickly than envisaged by the relatively lengthy timeline for implementation” Rowell said.
“We would also encourage you to think about where you should go further than the minimum provisions set out in the Code, with a view to further enhancing the outcomes being delivered to members,” she added.
The ISWG Code of Practice will come into effect on 1 July 2018 and super funds signing onto the Code will have until 30 June 2021 to fully comply with it.
A similar code was released and adopted by the FSC for its retail life insurance members in July 2017 (see: FSC Life Code Commences With Finalised Trauma Definitions) with early calls that it too exceed minimum standards to regain consumer trust (see: Insurance Code Needs to Exceed the Law).