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Group cover, SCT remit ‘confuses fund members’

Fund members are confused about the role of the Superannuation Complaints Tribunal (SCT) when handling disputes about group life insurance premiums.

“This confusion about what the SCT can and can’t deal with in relation to the deduction of premiums is often compounded by confusion about insurance offerings within super,” the SCT says in its latest bulletin.

“Some of the complaints we receive about the deduction of insurance premiums are not complaints for which we can provide a remedy.”

It says disputes about the deduction of premiums accounted for 8.6% of all administration complaints received in the second quarter of this year.

Many complaints stem from new fund members not realising they have automatically been provided cover, the SCT says.

“With low levels of consumer engagement in super, clear communication about the benefits and costs of a member’s insurance cover is important.

“Sometimes, a complainant will realise that the insurance arrangements were communicated clearly and often but that they simply weren’t engaged in reviewing it.”

The SCT says fund trustees should clearly communicate the insurance offering upfront, including the level of cover, premiums and how these are calculated and charged.

“Where possible, include the impact on the member, using examples or calculations that clearly demonstrate the differences in premiums and the level of cover.

“Provide clear instructions for opting out of or cancelling insurance cover. Objectively assess your communications and consider whether there has in fact been any ambiguity.”

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