Insurance in super code of practice released

The Insurance in Super Working Group (ISWG) has released its draft code of practice for life insurance held within superannuation.

In a statement, the ISWG said the voluntary code would represent “a strong step towards enhancing member interests and helping build confidence in and understanding of life insurance through superannuation”, as well as improving member value and protections.

The code includes a framework around the maximum amount of super contributions that should be used for automatically provided life insurance, simpler processes for members to opt out of insurance and simplified disclosure and communications to members about insurance.

It also provides requirements to cancel life insurance after funds contact members where a super account is inactive, provision of better assistance to members during claims, standards for handling premium adjustments and requirements for trustees to publish their plans to implement the code.

ISWG chairman Jim Minto said the code would help members better understand the value of life insurance through super.

“[Group insurance] delivers enormous benefits without underwriting and must be preserved as a unique aspect of our super system,” Minto said.

“This code helps automatic insurance function even better for members, as well as providing enhanced protections where members have decided to acquire opt-in life insurance cover through super.”

The group said it would work with the various super industry associations to implement the code next year, as well as consulting with the Australian Competition and Consumer Commission on getting authorisation for the code.