A report released by ASIC has found a number of discrepancies in the practices of superannuation funds that have resulted in detrimental customer outcomes.
In its Member experience of superannuation report released last Friday, ASIC raised concerns with a number of disclosures and practices of superannuation funds.
ASIC found instances relating to poor disclosure where members' insurance cover had ceased or changed without adequate forewarning by the superannuation trustee.
The regulator also found that there are cases of poor interaction between trustees, insurers and service providers resulting in delays and poor communication to members, while claims and complaints handling processes are also poorly explained to members.
Further, ASIC found that some trustees may have been using inappropriate defaults in dealing with their members. In some cases, where trustees had moved members within a fund, trustees were treating members as 'smokers' for the purposes of calculating their insurance premiums without knowing whether the member smoked or not.
Meanwhile, none of the trustees had a strategy to deal with vulnerable consumers (including Indigenous and Torres Strait Islander members), ASIC said in the report.
“The findings of this report will inform two of ASIC's compliance projects which are underway in superannuation for 2017, 'Employers and Super' and 'Insurance in Super',” ASIC said.
The regulator said it is particularly interested in how widespread the issue of deeming, by default, members as 'smokers', and the associated cost of additional premiums.
"We intend to make public the results of our 2017 project work. Now is the time for trustees to consider whether their practices are in the best interests of members, as well as whether their members are adequately informed of decisions affecting them," ASIC deputy chairman Peter Kell said.
The banking regulator has announced that it will give banks greater flexibility to their own serviceability floors in a move that could open...
APRA has issued directions to companies within the major ASX-listed wealth management group for failing to comply with licence conditions....
ASIC chair James Shipton called for financial institutions to make the industry more inclusive to all parts of the community, as internation...