Superannuation funds should brace for having to begin stricter reporting around their selection of group insurers later next year.
The Australian Prudential Regulation Authority (APRA) has flagged its intention to finalise changes recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2020.
The Royal Commission recommended that superannuation funds that engaged a related party to provide group life insurance or who entered into a contract which delivered them a privilege should be required to report to APRA.
The Royal Commission recommended that the affected superannuation funds should be required to provide within a fixed time “independent certification that the arrangements and policies entered into are in the best interests of members and otherwise satisfy legal and regulatory requirements”.
APRA used the release of an update of its response to the Royal Commission recommendations to note that it had moved to strengthen relevant prudential framework and that the enhancements included refinements that would strengthen the requirements on trustees when selecting an insurer “especially when a potential insurer is a related party”.
“APRA will be consulting on proposed changes to the prudential framework later this year with a view to finalising them in 2020,” the regulator said.