The Financial Services Council (FSC) is proposing to prohibit any terms in MySuper group life policies that could cause a claim to be declined in default group life insurance in superannuation on the basis of a change in occupation.
The FSC issued a policy proposal to address the life insurance issues brought about by the Government’s Your Future, Your Super stapling measure.
“Superannuation members can be stapled to a MySuper fund that has default group life insurance that contains exclusions based on occupational classification,” the FSC said.
“In a small number of instances when an employee moves between occupational classifications, at time of claim they may find themselves unable to claim against their default insurance coverage in the MySuper product.”
The FSC’s proposal asked for feedback on different options to implement the solution and the options included:
The council said it was looking for feedback on the proposal until 3 September, 2021.
The insurance company has joined this year’s awards as a principal partner.
The $135 billion fund has transitioned away from TAL Life Insurance following an “extensive tender process”.
The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.