At a recent hearing of the House economics committee, deputy chair Andrew Leigh slammed ASIC for “not yet responding” to calls for an investigation from Labor MP Matt Thistlethwaite into the Colonial Super Retirement fund.
The fund had increased members’ annual life insurance premiums from $5,494 to $7,804 – an approximately 42 per cent rise – and entered into a further three-year contract with related entity CommInsure to provide group insurance to the fund, Mr Leigh said.
Responding to questions on notice from the committee, ASIC said it had referred the matter to APRA and would not be taking further action.
“APRA has primarily regulatory responsibility for enforcing the duty of fund trustees to act in the best interests of members,” ASIC said.
“ASIC and APRA have a close and co-operative working relationship and we regularly share intelligence, including in relation to market practices in insurance in superannuation.”
The regulator said information provided by Mr Thistlethwaite was inconclusive around whether the fund trustee had breached its obligations to act in the best interests of members.
“Whether the trustee contravened the law in any way by entering into a new three-year contract with the insurer is a matter that would require a fulsome analysis of the decision-making process of the trustee in relation to this matter,” ASIC said.
“There are a significant number of complexities, and threshold steps, needed to establish an actionable contravention of the law. The mere existence of a significant price increase is not determinative of a breach in and of itself.”
ASIC said it “did not propose to investigate” the Colonial fund any further based on the information provided.
“ASIC continues to monitor trustee practices about insurance product changes, including premium price changes, across the industry to the extent that they relate to ASIC’s regulatory remit,” the regulator said.
What a cop out from ASIC. Do they have any idea of the premium increases insurers have been applying since the LIF? Try at least 100%++ Much of these are simply because of new business drying up (thanks to the LIF) and insurers still needing to make a profit and pay their bonuses.
From memory no one asked questions when a major insurer raised prices 90%+ just a year or two back
UniSuper have just announced that as at 1st October their insurance cover rates will change.
According to their website, ” The Government’s recent changes to insurance in super have led to an increase in costs, which means we’ve had to increase our insurance premiums for Death & Total & Permanent Disablement cover. We’ve also had to make some changes to our Income Protection (IP) cover.
We work closely with our insurance partner TAL, to ensure any price increases are as reasonable and transparent as possible. We only charge what it costs us to provide insurance cover.”
The actual premium increase noted for IP cover with a benefit period to age 65 is 133.3%.
Has Andrew Leigh and Matt Thistlethwaite raised this issue as yet or are they just going after the Colonial/Comminsure
matter because it sits better with them from an ideological standpoint.
The latest increases are very difficult to accept irrespective of the institution or provider but I have yet to see evidence of any other examples of 133.3% increases at this stage.
This is horrendous and will simply drive more and more people away from accepting or taking the correct level and type of insurance required for financial protection.
This will then drive a massive under insurance issue and increase pressure on the public system, thereby costing taxpayers significantly more to support people who are disabled, have died or unable to work because of injury or illness.
No wonder ASIC is so biased in favour of union funds, when they receive constant threats and intimidation from the union’s parliamentary wing (Labor). One assumes if Labor gets into power they will be tracking down the ASIC recalcitrants who failed to do what they were told on this occasion
LOL, they pass new legislation and then get upset when that increases cost. Got to love the pollies.
Just another example of the decision makers in the financial arena clearly having no understanding of what it is they are actually legislating. Goal, affordable financial planning for all Australians. Legislated reality, a costly and restrictive process for all, that excludes everyone but the wealthy.
Exactly = [b]Goal, affordable financial planning for all Australians.
Legislated reality, a costly and restrictive process for all, that excludes everyone but the wealthy.[/b][b][/b]
100% Canberra Bubble Morons, no1. KPI = MORE BS REGS = MORE COSTS !!!!
Great job Canberra – For F##K Sake these clowns have zero real world idea.
Honestly – how dumb are the regulators and policymakers? It would be nice if any of these organisations actually tried to understand and considered the consequences of reforms prior to making changes to the system and then being “blindsided” by an outcome. Why did the chicken stand in the middle of the f* road?
What is this article referring to when quoting premiums of $5494 to $7804 ?????
Who was the member, what was their age, what cover type was it, was the member a substandard risk, were they a smoker or non smoker ??????
There are absolutely no parameters around what this is in reference to.
I wonder if the member was advised this premium increase might affect their retirement capital outcome, and showed the member the projected accumulated premium …. to which a review ought to have been offered. sleepy asic zzz
42% seems a touch light compared to some others. The ALP are getting what they wanted with no advisers — they just weren’t smart enough to think through all of the items which would come from their actions a few years ago.
that is nothing, I just received a 100% increase for a client with a level premium IP policy in force 20 years… thanks for your loyalty!!
best interest standards being upheld by trustees? another example of red tape and no win for the member / consumer.
reforms and cutting commissions really work well with insurance companies HA!
Why hasn’t anyone got upset about Hostplus increasing their IP premiums by 73%?
leave the unions alone they are Labor cash cows & untouchable
While I understand that you can only report what actually happened, surely this article should have read:
In one example referenced by Mr Leigh, for one member, reportedly; ‘The fund had increased members’ annual life insurance premiums from $5,494 to $7,804 – an approximately 42 per cent rise – and entered into a further three-year contract with related entity CommInsure’. To be honest this doesn’t really tell us much except one members premiums rose over 40%, which, while I agree is totally unacceptable, doesn’t really tell us the whole story. If that is the quality of the information presented to ASIC, no wonder they can with say it’s inconclusive…
What about Hostplus where their Significant Event Notice dated 24 September 2020 states that [b] “Salary Continuance premium rates for the 2-year benefit period will increase by 22.3%. Salary Continuance premium rates for the ‘To age 65’ benefit period will increase by 73.7%.”[/b][b][/b]?
Hypocrites! The industry funds did this while at the same time lowering member insurable benefits and negotiating a higher commission paid to themselves just a couple of years ago!!
Political manoeuvring at the expense of Australia’s retirement wealth.
Labor/Unions/Union Super – the axis of corruption must stop
Dear Mr Labor MP Matt Thistlethwaite, how about you look at ALL the Life Insurance increases.
A huge amount of policies across the board are up 50% to 60% over last 3 years.
And plenty are up closer to 100% over last 3 years.
[b]Get off the single Life Insurances, Retail Super whinge mate and look at the big picture.
LIF anyone ???????????????[/b][b][/b]