When the Government’s ‘Your Future, Your Super’ reforms were passed this year they introduced an important consumer protection to ‘staple’ superannuation members to their fund, so that they take their superannuation account with them from job to job. The stapling regime came into effect on 1 November.
The FSC recognised that an unintended outcome of this new stapling regime would be that some consumers may be unable to claim on their default life insurance cover because their fund has occupational exclusions in its default group life insurance. This is despite the fact that they have been paying for this insurance through their superannuation.
Realising this concern and after public consultation with a wide range of stakeholders on the issue, we recently announced our intention to implement an enforceable FSC Standard that will prohibit FSC superannuation trustees and life insurance members from using such exclusions on any group life insurance policies.
We’ve pushed for an industry-led solution to ensure that action is taken as soon as possible to remove these exclusions. It is important that all Australians have certainty over their insurance cover especially at a time when they are changing jobs. At a recent industry conference, a clear majority of all Trustees indicated that they would prefer an industry-led solution rather than government intervention.
Introducing this Standard will ensure that Australians will be able to rely on their default cover at a time when they need it most.
You can view the submissions the FSC received to our consultation here.
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