On Tuesday (18 January), the industry fund was hit with the penalty for “providing members with misleading information regarding their insurance and failing to breach report the issue to ASIC in the time required by law”.
Between 2017 and 2020, Statewide was found to have sent over 14,000 annual statements or other correspondence to at least 7,000 members representing that they held insurance within their superannuation where their insurance cover had lapsed.
Statewide was found to have overcharged insurance premiums of at least $2.5 million to some members and failed to report these issues within 10 days of becoming aware of them.
A Statewide Super spokesperson responded to the penalty in a statement given to InvestorDaily.
“Statewide Super notes that the Federal Court has chosen to impose a lesser penalty than that sought by ASIC. Statewide Super advises that it has the appropriate insurance and this penalty will not be paid for by members,” the statement read.
“At no time did ASIC alleged any dishonesty, fraud or intent to mislead or deceive members. Justice Besanko’s reasons reinforce this, acknowledging the conduct of Statewide Super was never deliberate or motivated by profit and the organisation took steps to investigate and remedy the problems. He also noted the fund’s contrition and cooperation.”
It adds: “Statewide Super self-reported the insurance administration error, did not intentionally provide any incorrect information to members in relation to their insurance status, nor intentionally charge incorrect insurance premiums.”
The spokesperson said that all affected members will be fully remediated and that all insurance entitlements will be honoured.
The remediation process is to be finalised in the coming weeks.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
