Insurance in Superannuation Voluntary Code of Practice

This Code which comes into effect from 1 July 2018 is a first for the industry and sets standards that will provide greater understanding, clearer accountability and consistency of delivery for insurance benefits provided in superannuation across the industry.

The Code improves superannuation member value and protections and is a strong step towards enhancing member interests and helping build confidence in life insurance through superannuation.

ASFA, the Australian Institute of Superannuation Trustees (AIST) and the Financial Services Council (FSC) are the owners of the Code, supporting their respective members to implement the Code.

The Code is voluntary for superannuation funds to adopt and ASFA anticipates the vast majority of superannuation members will be in funds that have adopted the Code.

Code update

Recent changes to the law, through the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 (PYS) and Treasury Laws Amendment (Protecting Your Superannuation Package) Regulations 2019, require amendments to the Insurance in Superannuation Voluntary Code of Practice.

This revision will occur after consideration by the Parliament of the Putting Members’ Interests First Bill 2019 (which would make insurance opt-in for members under age 25 or with an account balance of less than $6,000) and will take account of these further measures.

The list of ASFA members who have stated intent to adopt the Code is as follows:

ANZ Australian Staff Superannuation Scheme	Club Super	Lutheran Super	Russell Investments Master Trust
ANZ Wealth	Combined Super	Macquarie Wealth	Sandhurst Trustees
Australian Catholic Super	Commonwealth Bank Group Super	Mercer	Statewide Super
Australian Ethical Superannuation	CSC	Mercy Super	Suncorp
Australia Post Superannuation Scheme	Diversa Trustees	Mine Super	Sunsuper
AustralianSuper	EISS	MTAA	TAL Super
AustSafe Super	Equip	NAB Wealth	Tasplan
BT Financial Group	Equity Trustees	Nationwide Super	Telstra Super
BUSSQ	First State Super	Netwealth	Towers Watson Superannuation Fund
Catholic Super	Guild Trustee Services	NGS	TWU Super
CBA Wealth	Hostplus	Perpetual	UniSuper
CBUS	IOOF	Prime Super	VicSuper
Challenger	Legal Super	Qantas Super	Vision Super
Christian Super	LGIAsuper	QIEC Super	VISSF
ClearView Wealth	LGS	REI Super	WA Super
Club Plus Super	LUCRF Super	Rest	Zurich Australian Superannuation

Industry guidance:

Insurance in Superannuation Key Facts Sheet | Information cover sheet for Trustees

The Key Facts Sheet’s purpose is to provide high-level, fund-specific insurance information in a format that is consistent across the industry, to help consumers better understand their cover and enable them to compare cover easily across different superannuation funds. The information cover sheet provides trustees with additional information about the use of the Key Fact Sheet and how it may be customised to their insurance offering.

Guidance for transitioning to the Code

This second Code guidance document has been developed by the Code owners ASFA, AIST and FSC in consultation with a Code Transition Committee made up of trustee, insurer and administrator representatives.

Within the document a framework for trustees to develop their transition plan for implementing the Code is provided. Funds that have adopted the Code are required to publish these plans on their website by 31 December 2018.

Updated spreadsheet for discussion on Code

This document contains a table of the standards of the Code beginning at section 3, along with a record of any discussions that the Transition Committee has had to date on complying with the standards.

This table will continue to be developed over time as the Transition Committee meets, and the updated table will be made available to trustees.

Guidance for adopting the Code

This guidance has been to developed by the Code owners ASFA, AIST and FSC in consultation with a Code Transition Committee made up of trustee, insurer and administrator representatives.

The first document provides guidance to trustees relating to the Code adoption process and includes introductory information on transitioning to, and complying with its obligations.

Spreadsheet for discussion on Code

The second document is a table that fund representatives can use to communicate with the Transition Committee. Questions and comments provided on this document will be considered by the Committee and then updates will be circulated to funds that have adopted the code.

Consultation paper:

Insurance in Superannuation Code of Practice

This draft code outlines a set of industry standards and new measures for all classes of insurance in superannuation, including life, total and permanent disability (TPD) and income protection. It has been jointly developed over the past 10 months by the ISWG with input from insurers, super funds and legal and consumer groups, as well as other stakeholders.

View submissions

Discussion Paper Five:

Premium Adjustment Mechanisms

This paper outlines how practices sometimes described as ‘profit share arrangements’ apply across the industry and operate in practice.

Discussion Paper Four:

Data Management

This paper outlines proposals that seek to enhance member insurance outcomes by improving access to timely and relevant information.

Discussion Paper Three:

Member communication and engagement

This paper outlines options to improve member engagement and understanding of their insurance arrangements within superannuation. Some practical options are proposed to help bring these aspirations to life including use of standardised consumer language and terms across the industry.

View submissions

Discussion Paper Two:

Claims handling

This paper examines existing practices and issues associated with insurance claims handling and outlines some ambitious changes in timeframes developed by superannuation and life industry representatives to improve the member experience.

View submissions

Discussion Paper One:

Account balance erosion due to insurance premiums

This paper examines how to address the issue of members paying for cover they don’t need through having multiple super accounts.

View submissions

Survey:

ISWG Premium Limits Survey

The ISWG is asking each of the participating funds to consider how it will comply with this test from both a methodological and an outcome perspective.