Cbus welcomes insurance code of practice
18 December 2017
The Insurance in Superannuation Voluntary Code of Practice, released today by the working group, is a sensible and workable outcome that will ensure Cbus can continue to provide insurance cover to our members that meets their needs on a cost, coverage and accessibility basis, while establishing best practice guidance around expectations of group insurance provision.
Group Executive Brand, Advocacy, Marketing and Product, Robbie Campo, said Cbus supports the intent of a Code of Practice that articulates best practice standards for insurance within superannuation. However, she noted that an overly prescriptive mandated Code had the potential to cut across the high fiduciary obligations on funds which require them to act in the best interests of members.
“For Cbus members, a one-size-fits-all approach would have significantly reduced the level and scope of our cover and left many members without any cover at all,” Ms Campo said.
“Our members work in some of the toughest and riskiest conditions of any industry which is why being able to access affordable insurance through superannuation is important and valuable to them.
“We know that given the nature of the work our members undertake that many simply wouldn’t be able to access insurance if it wasn’t through Cbus’ group life offering.
“We believe the Code strikes the right balance between ensuring members receive adequate insurance cover while not paying unnecessary fees that eat into their retirement savings.”
Cbus members recently welcomed a new insurance deal that saw premiums per unit of Death & TPD insurance cover for most members go down by 25 per cent while total and permanent disablement (TPD) cover increased for the majority.
In an industry leading move that recognised the fact that young people are less likely to have dependants or mortgages and that more super savings earlier is critical over the long term for retirement balances, default death cover for 15 – 20 year olds was also reduced.
“Cbus’ changes to cover for younger members is an example of the Fund tailoring solutions to our members’ needs – our experience is that by the time our members reach 21, they have been in the workforce for 3-4 years and often have dependents, therefore an overly prescriptive mandated code that included a catch all definition of young people as under 25 would have negatively impacted our members. We know that most death claims made in relation to members over the age of 21 years are paid to dependents,” Ms Campo said.
Ms Campo said that Cbus focuses on continually improving its members experience of its insurance offering to ensure that members are well supported during what is invariably a difficult time in their lives. This includes communications around insurance issues, claims processing and timing.
“Our view is that insurance cover for members is important and valuable and our philosophy is that legitimate claims should be paid. Over the longer term around 85% of our TPD claims have been paid,” Ms Campo said.
As an active participant in the superannuation industry, Cbus is supportive of the Code being reviewed on a periodic basis to ensure it continues to articulate best practice guidance.
Media contact: Carla De Campo, 0410 579 575