Insurance

Insurance

AIST’s Insurance Policy Position

AIST supports the role that group life insurance plays in providing benefits to Australians who might otherwise be left uninsured.  

Insurance is crucial in ensuring that that fund members and their families aren’t inconvenienced due to death or disability.  AIST promotes the sensible provision of insurance that meets members’ needs and includes:

  • Trustees and insurers working together to tailor insurance offerings to fund members to ensure that benefits are designed to reflect occupational and other relevant demographics;
  • Appropriately crafted death cover to ensure that families who lose a member are able to adjust to life without them;
  • Protection of members’ financial wellbeing if their working lives are threatened by illness or injury;
  • Assisting with members’ financial commitments if unable to work; and
  • The provision of transparent and effective communication and disclosure to ensure that members expectations are compatible with trustees’ accountability.

Responsible insurance reduces the risks to retirement savings faced by members due to loss of income.  AIST supports the offering of sustainable and sensibly designed benefits that provides real value to members and their families, whilst acknowledging the impact on benefits in retirement of premium and other insurance-related costs.

AIST is also a member of the Insurance in Superannuation Working Group (ISWG). You can find out more about the ISWG and what we do here.

You can select from our range of publications on this topic below: 

 

20 Sep 2017 - Super industry consults on draft Insurance Code of Practice to improve outcomes for members

The draft Code - outlining 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 - 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.

1 Sep 2017 - ISWG fifth discussion paper

The Insurance in Superannuation Working Group today released the fifth in a series of discussion papers as a further step towards developing an Insurance Code of Practice for superannuation trustees.

28 Jul 2017 - ISWG fourth discussion paper

The Insurance in Superannuation Working Group today released the fourth in a series of discussion papers as a further step towards developing an Insurance Code of Practice for superannuation trustees.

5 May 2017 - ISWG third discussion paper

The Insurance in Superannuation Working Group (ISWG) is calling for submissions on a third discussion paper that outlines options to improve member experience and understanding of insurance within superannuation.

7 Apr 2017 - ISWG second discussion paper

The Insurance in Superannuation Working Group (ISWG) today released the second in a series of discussion papers as a further step towards developing a Life Insurance Code of Practice for superannuation trustees.

13 Mar 2017 - Group insurance data collection guidance released to improve consumer outcomes

AIST, FSC, IFF and ISA have together released best practice guidance for Group Insurance Data.

9 Mar 2017 - Call for submissions on Insurance in Superannuation Working Group discussion paper

The Insurance in Superannuation Working Group (ISWG) today released the first of a series of discussion papers as a first step towards extending the Life Insurance Code of Practice to superannuation trustees.

20 Dec 2016 - Improving life insurance in superannuation for consumers

Joint release from the Insurance in Superannuation Working Group on the priorities of the group.

3 Nov 2016 - Joint media release: Insurance in Superannuation Industry Working Group

Australia’s superannuation industry bodies have established the Insurance in Superannuation Industry Working Group.

12 Oct 2016 - AIST welcomes heightened APRA and ASIC focus on insurance to improve consumer outcomes

AIST today welcomed moves by both APRA and ASIC to improve consumer outcomes in life insurance products.

6 Oct 2016 - Group insurance statement of intent

Australia’s superannuation bodies share a common belief in the following principles underlying group insurance in superannuation.

13 Mar 2015 - What will the superannuation industry be like in 2025?

A survey of the superannuation industry by AIST and BNP Paribas Securities Services has shown the world we are planning for today will be very different in 10 years' time.

26 Aug 2014 - Renovate the house don’t pull it down – AIST responds to the Financial System Inquiry

The Australian Institute of Superannuation Trustees (AIST) said today Australia’s $1.85 trillion superannuation system is on track to deliver further cost savings and value to members with the recently launched MySuper having already led to significant fee reductions*.

16 Jul 2014 - AIST to provide comprehensive response to the Financial Systems Inquiry interim report

The Australian Institute of Superannuation Trustees (AIST) said today it would begin preparing a comprehensive response on key superannuation issues raised in the Financial System Inquiry’s interim report. AIST CEO Tom Garcia said AIST welcomed the Inquiry’s support of a robust regulatory framework for superannuation, its recognition of superannuation’s important role in the economy, and the need to develop clearer objectives for the superannuation system.

20 Oct 2017 - Insurance in superannuation code of practice

AIST supports the draft Code of Practice. AIST makes eleven recommendations as part of this submission, based upon key themes that have emerged from consultation with AIST members. AIST notes the low awareness of group insurance in superannuation and recommends that the importance of this be better communicated.

31 Aug 2017 - ISWG fifth discussion paper - Premium Adjustment Mechanisms

The fifth paper released by the Insurance in Superannuation Working Group (ISWG) outlines how practices sometimes described as ‘profit share arrangements’ apply across the industry and operate in practice.

28 Jul 2017 - ISWG fourth discussion paper - Data management

This paper from the Insurance in Superannuation Working Group outlines proposals that seek to enhance member insurance outcomes by improving access to timely and relevant information.

5 May 2017 - ISWG third discussion paper - Member communication and engagement

The third discussion paper released by the Insurance in Superannuation Working Group (ISWG) outlines options to improve member engagement and understanding of insurance arrangements within superannuation.

17 Nov 2016 - Joint submission: Inquiry into the Life Insurance Industry

AIST and ISA welcome this inquiry, which is examining the industry, in particular stories that may identify widespread issues and recommendations for reform. ISA and AIST are working with the superannuation and insurance industries to further improve the insurance experience of members, but there is more to do.

7 Oct 2016 - External Dispute Resolution Framework

The Government’s review of the financial system’s external dispute resolution framework must carefully consider the needs of consumers. Due to the growth of the superannuation sector the dispute resolution framework must continue to be well equipped to deal with consumer demands and AIST believes that there is scope for improvement. AIST is not opposed to the establishment of a triage service, or a single disputes handling body.

16 Sep 2016 - Superannuation reform package – Objective of superannuation

In conjunction with other industry associations, AIST seeks that the Government consult further prior to introduction of the Bill. We seek the amendment of the primary objective to include reference to providing an adequate income that delivers a comfortable retirement. AIST also seeks an additional subsidiary objective of increasing national savings; recognition of insurance as key part of the ‘sole purpose test’; Parliamentary committee review of statements of compatibility; and the development of tools to assess compatibility.

28 Apr 2016 - Draft regulations – life insurance remuneration reform

AIST supports the removal of the exemption to conflicted remuneration of life insurance commissions. Whilst we the additional clarification contained in the draft regulations, we emphasise that this would not be necessary if commissions had been completely outlawed as they have been on other financial products.

15 Apr 2016 - Senate Economics: Life insurance industry inquiry

AIST believes that the recent high profile failures in the insurance sector has come about due to differing expectations. AIST supports efforts to resolve this, but further notes that the many changes to policies, both at a macro/legislative level as well as at policy levels can only confuse consumers. AIST supports a code of conduct but stresses that this must be independently administered and resourced, as well as appropriately user tested. AIST also calls for a ban on commissions.

7 Mar 2016 - Senate Economics: Changes to life insurance remuneration arrangements

This Bill removes the exemption on benefits paid in relation to life insurance products from the ban on conflicted remuneration. AIST supports the removal of this exemption, however would also support an eventual end to commissions on life insurance products. AIST does not support the ability for ASIC to exempt certain payments by way of legislative instrument, and recommends that this be phased out by way of a sunset clause. We also recommend that clawback payments be returned to investors, and that disclosure rules be toughened to ensure that commissions are better disclosed.

24 Dec 2015 - Life insurance reform legislation

This exposure draft removes the exemption on benefits paid in relation to life insurance products from the ban on conflicted remuneration. AIST supports the removal of this exemption. AIST does not support the ability for ASIC to exempt certain payments by way of legislative instrument, and recommends that this be phased out by way of a sunset clause.

24 Dec 2015 - Raising professional standards of financial advisers

AIST supports the proposed requirements for financial advisers to require a bachelor’s degree, a professional year and the passing of an exam. We also support the requirement of an industry-wide code of ethics administered by a body chosen by the Minister. AIST submit that the transitional provisions must ensure that practitioners have appropriate time to comply.

31 Mar 2015 - AIST releases submission to final FSI report

AIST’s response to the Government on the Final Report of the Financial System Inquiry (FSI). The FSI Final Report makes a number of recommendations about superannuation and canvasses a range of policy options.

21 Oct 2014 - CGT exemption for compensation and insurance

This exposure draft broadens the exemption for superannuation funds from capital gains tax (CGT) in respect of compensation for certain events (e.g. injury at work) or insurance policies, such as illness, injury or death.

8 Oct 2014 - Letter to Treasurer of Victoria: Changes to stamp duty on life insurance

On 1 July 2014, changes made by the Government of Victoria to life insurance came into effect. AIST’s letter to the Treasurer outlines our issues with this and recommends that TPD be treated the same way as death cover.

26 Aug 2014 - Response to Financial System Inquiry Interim Report

The Financial System Inquiry, chaired by David Murray, has released its interim findings in to the financial system of Australia. This is AIST's response to these findings.