ASIC has imposed additional licence conditions on the AFSL of a NAB superannuation trustee, following internal breakdowns that led to incorrect assessments of member insurance claims.
According to a statement this morning, the new conditions follow ASIC’s enquiries into breach reports lodged by NAB’s wealth entities.
The breaches involved a breakdown in risk management and communication procedures following the transfer of members in 2012 and 2013 to MLC MasterKey Business Super (MKBS) and MLC MasterKey Personal Super (MKPS).
There were also changes made to the death and TPD insurance of MKBS and MKPS. About 400,000 members were impacted by the insurance changes, ASIC said.
The system breakdowns include inadequate disclosure of insurance changes to members, inadequate training for staff and insurance policies not being updated.
As a result of the breakdowns, incorrect death and TPD insurance tests were applied to MKBS and MKPS members between May 2013 and July 2015.
NAB’s wealth entities have identified that 10 members’ insurance claims were incorrectly assessed with approximately $1.6 million in members' claims underpaid or declined.
The bank has compensated affected members a total of $1.8 million, including interest, ASIC said.
In addition, NAB’s wealth entities identified that over 220,000 member accounts were incorrectly charged planned service fees (PSFs) of approximately $34.7 million between September 2012 and October 2016 in the MKPS and MKBS products.
Members were charged PSFs for the provision of general advice in circumstances where no adviser had been appointed to provide such advice.
ASIC's report, titled Financial advice: Fees for no service, issued in October 2016, included part of this amount in the estimates of compensation to be paid to consumers for such failures.
Since the release of that report, NAB has confirmed that it will compensate these fund members for the incorrect charge and have also confirmed the compensation to be paid.
ASIC's inquiries into the PSF breaches are continuing.
FASEA has formally registered a legislative instrument to grant three months’ ...
ASIC has revealed it was forced to take action on more than a dozen incidents of...
The government has flagged it may look at extending regulatory provisions for sc...