AIST Policy News - 24 January 2019

AIST Policy News - 24 January 2019

Profit-to-member funds embrace Insurance in Super Code

Over 96% of the members of profit-to-member super funds are now covered by the Insurance in Super Code of Practice.

AIST CEO Eva Scheerlinck said the $1.3 trillion profit-to-member sector’s overwhelming support for the Code would lead to significant insurance changes and improvements for millions of super fund members, including faster and better claims handling.

“The industry’s commitment to the insurance Code will result in superior member outcomes,” Ms Scheerlinck said. “These reforms are very significant and touch on every aspect of the insurance offering.”

Ms Scheerlinck said the Code was broader and much more comprehensive than the ‘one size fits all’ approach of the insurance aspects of the Protecting Your Super reform package currently before Parliament.

AIST is now calling on the government to amend the insurance aspects of the Protecting Your Super Bill currently before the Senate to align with the Code.

“This would provide certainty for members and funds and the smooth implementation of higher standards,” Ms Scheerlinck said.

All AIST member funds signed up to the Code have published transition plans on their websites, with most planning to fully comply ahead of the Code’s official deadline. AIST has also published a consolidated list of transition plans on the AIST website.

For more information on the Insurance in Super Voluntary Code of Conduct, contact Senior Policy Manager, David Haynes,

ASIC provides further disclosure relief from 29QC

The Australian Securities and Investments Commission (ASIC) has extended an ASIC relief instrument for a disclosure-related obligation of superannuation trustees.

The extension provides relief from section 29QC of the SIS Act.

This section requires a superannuation fund trustee that has given information to Australian Prudential Regulation Authority (APRA) under an APRA reporting standard, that the trustee gives the same or equivalent information to another person, or on a website, the fund trustee must ensure that the information is calculated in the same way as the information given to APRA.

Originally due to expire on 1 January 2019, the extension will allow additional time to consider the policy position in relation to a disclosure-related obligation of superannuation trustees.

ASIC will adjust or revoke the relief once policy positions in relation to the aspects of disclosures by superannuation funds are settled.

Fees and costs disclosure consultation paper now available

The Australian Securities and Investments Commission (ASIC) is seeking feedback on proposed changes to the fees and costs disclosure for superannuation entities.

The consultation paper for the review ofRG 97 Disclosing fees and costs in PDSs and periodic statementsseeks industry input to assistASICto ensure that consumers receive transparent and useable information that helps them understand fees and costs, compare products, and make confident and informed choices.

The paper also seeks input into further draft amendments to Schedule 10 of the Corporations Regulations 2001.

The consultation is open for a period of three months, with comments due by2 April 2019.

Key proposals that ASIC are seeking to take forward include:

  • simplifying how fees and costs information is presented to consumers
  • reducing data inputs, including eliminating the requirement for fees and costs disclosure to incorporate some cost categories, particularly property operating costs, borrowing costs and implicit costs
  • making disclosure for managed investment schemes more consistent with superannuation

ASIC’s work on RG 97 is an extension of the Darren McShane review of RG 97 that released its final report last July.

Further information about the consultation’s progress will be available on the ASIC website.

Keep Insurance in Super Code out of FSC code – AIST

AIST has raised concerns that the Insurance in Superannuation Code of Conduct will be watered down if it was amalgamated into the Financial Services Council (FSC) Life Insurance Code of Practice.

In a submission to the FSC’s draft Life Insurance Code of Practice, AIST has called for the FSC to recommit to the existing Insurance in Super Code.

AIST is concerned the revised FSC Life Insurance Code may:

  • Result in the removal of the 1% of salary premium cap and other specific consumer protections
  • Delay implementation of improved standards and consumer protections
  • Reduce transparency of the process and outcomes
  • Disrupt the collaborative efforts of the super industry in developing an effective Insurance in Super Code

The proposed merger of the codes distracts from industry effort to lift standards and improve member outcomes through the promotion and implementation of the Insurance in Super Code.

AIST also raised concerns that the FSC code will reduce standards and remove consumer protections, as well as reducing standards and protections in the Insurance in Super Code.

The deadline for funds to make a submission to the FSC in relation to its Life Insurance Code of Practice has been extended to January 31.

Kelly O’Dwyer to retire at next election

Minister for Jobs and Industrial Relations, Kelly O’Dwyer, has announced she will not be contesting the upcoming election, leaving politics after nine years in Parliament.

Ms O’Dwyer held the role of Minister for Revenue and Financial Services from July 2016 to August 2018, overseeing the Coalition Government’s key superannuation measures.

During her two years as minister responsible for superannuation, Ms O’Dwyer was involved in attempts to mandate one-third independent directors on super boards, extending Choice products to EBA’s as well as championing the Productivity Commission’s proposed ‘best in show’ model for default funds.

Announcing her resignation, Ms O’Dwyer said she wanted to spend more time with her children who are reaching school age.