RC canvasses ban on ‘associated’ group insurers

The Royal Commission has directly questioned whether superannuation funds owned by the major banks and AMP should be able to use insurance companies owned by the same parent as their group insurers.

In a document canvassing policy questions emanating from the Royal Commissions’ hearings focused on the insurance sector, the industry has been asked: “Should RSE Licensees be prohibited from engaging an associated entity as the fund’s group life insurer?”

It then asked, “Alternatively, should RSE Licensees who engage an associated entity as the fund’s group life insurer be subject to additional requirements to demonstrate that the engagement of the group life insurer is in the best interests of beneficiaries and otherwise satisfies legal and regulatory requirements…?”

The Royal Commission document has also canvassed whether the insurance inside superannuation code of practice should be made enforceable.

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It asked whether the terms set out in the Insurance in Superannuation Voluntary Code of Practice [were] sufficient to protect the interests of fund members?

“If not, what additional protections are necessary?” the document asked.