In an addition to the Life Insurance Code of Practice, superannuation funds may need to provide a life insurance 'claims philosophy' that explains how they propose to ensure members get taken care of during insurance claims. Proposals include a review of insurance claim decisions and helping members make claims.
The discussion is now heating up regarding insurance within superannuation, with the Insurance in Superannuation Working Group (ISWG) releasing a second paper with a focus on claims handling.
What is the ISWG?
The ISWG is an industry group formed in late 2016 that includes representation by the Australian Institute of Superannuation Trustees (AIST), the Association of Superannuation Funds of Australia (ASFA), the Financial Services Council (FSC), the Industry Funds Forum (IFF) and Industry Super Australia (ISA).
The point of the ISWG is to create the standards by which the industry abides to ensure the experience of life insurance within superannuation is solid, consistent, and adequately monitored. Currently the process is inconsistent and a best-practice framework doesn't exist, with no balance between member needs individually and cost, plus retirement requirements. Levels of service are not uniform.
The most recent paper suggests that changes need to be made to improve the insurance experience of superannuation members. Proposals include setting a timeframe for superannuation funds relating to the claims procedure - sending out forms, receipts of claims, eligibility, and how quickly a super fund would be expected to respond to a query.
Most claims, the ISWG says, should be completed within seven months unless there are exceptional circumstances, and income-related claims should be completed within three months. The ISWG is contemplating setting up a claims assistance service.