- AustralianSuper extends early release of insurance payouts to another 65,000 members;
- ASIC brings charges against unlicensed advice provider;
- Insurers lag on digitial engagement
AustralianSuper extends early release of insurance payouts to another 65,000 members
The largest industry super fund, AustralianSuper, has extended early release of life insurance payouts to members with a life expectancy of 24 months or less, to the 65,000 insured members in its Public Sector Division.
The moves comes after the fund become the first insurance provider to pay out life insurance benefits to terminally ill members with a life expectancy of up to 24 months, introducing the change for members in its’ Industry, Finsuper and Personal Divisions on 1 July 2015.
The extension is effective from the 1 November 2015 and follows negotiations with AustralianSuper’s insurer, MetLife, and changes to regulations which enabled people who have been certified by two medical practitioners as suffering a terminal medical condition and with a life expectancy under 24 months to access superannuation.
Previously early access was only granted to members living with a terminal medical condition and with a life expectancy of less than 12 months. As a result of this change AustralianSuper also extended its arrangements to allow access to life insurance payouts.
AustralianSuper said aligning the super and insurance payouts would alleviate extra stress and hardship at an already tough time.
“AustralianSuper wants to make sure any additional stress and trauma is minimised for members during what is an already very difficult period,” AustralianSuper’s Head of Insurance Product, Richard Weatherhead, said.
“This will go some small way towards making members’ lives more comfortable and allowing them and their families a greater level of dignity and financial security.”
ASIC brings charges against unlicensed advice provider
A South Australian man has been charged with carrying on a financial services business without a licence after the Australian Securities and Investments Commission (ASIC) found he recommended to clients that they dispose of their superannuation funds, which were then used to access loan funds.
The regulator brought the charges against Grant Thorsby Ross, who also known as David Thorsby Ross, and was the former sole director of Motabank (SA) Pty Ltd and the now deregistered Mulitmedia Marketing Pty Ltd.
ASIC charged Ross with one count of carrying on a financial services business without a licence and three counts of engaging in credit activity without a licence by performing the obligations of a credit provider and being a credit provider under a credit contract.
Under the case, which is being prosecuted by the Commonwealth Director of Public Prosecutions, ASIC alleges from 1 July 2010 to 13 November 2012 that Ross placed newspaper adverts in Victoria and South Australia offering access to loans dependent upon future superannuation entitlements.
Ross then was alleged to have promoted and operated a scheme facilitating the illegal early release of superannuation through the creation of self-managed superannuation funds (SMSF) to people who responded to the adverts.
ASIC also alleges that clients would transfer super funds into the the newly established SMSFs, and then would lend funds to Ross’ company which was then either loaned by the company or Ross personally back to the trustess of the SMSF, after the deduction of a fee.
ASIC stated it investigated Ross, who does not and has never held an an Australian Financial Services Licence or an Australian Credit Licence, after concerns were raised by the Australian Tax Office.
Each charge carries a maximum penalty of two years imprisonment or a fine of 200 penalty units with the case set to return to the Adelaide Magistrates Court in late January 2016.
Insurers lag on digitial engagement
The insurance sector has been slow to build a digital presence which provides opportunities for new entrants and disruptive services to target current customers, according to the Australian and New Zealand Institute of Insurance and Finance (ANZIIF).
ANZIIF’s Digital Communications and Content Strategy Manager, Amy Gibbs, said the insurance sector did not understand the change required to deal with a growing digital revolution even though some groups had increased their online presence through the provision of digital content.
“There has been some positive movement in the last year, with a small number of insurers boosting their presence on social media and embracing opportunities to connect with customers online, but in comparison to other industries, many insurers have been slow to adapt,” Gibbs said.
Gibbs said any potential negative issues arising from the use of social media should be offset by concerns around the rise of peer-to-peer insurance and technology companies entering the industry as well as the missing opportunities to engage with consumers through digital channels.
“Insurers shouldn’t be online because tweeting or friending is the current fad, but because their customers are online and they expect to find their providers there too, in the same way they expect them to be in the phone book.”
“The trust that can be built by a long-term social presence, and the ability to give a human voice to an often maligned industry, should not be underestimated.”
