Suncorp Portfolio Services Limited (SPSL) has taken members with group life policies off smoker rates and is considering remediation of non-smokers.

An update from the Australian Securities and Investments Commission (ASIC) today says 1573 Suncorp members were identified as being affected and transferred from default “smoker rates” on February 1.

“Suncorp has not finalised whether they will remediate members,” ASIC says.

Over three years, ASIC engaged with seven superannuation businesses that had at some time assigned members to “smoker” status unless they took active steps to opt out of the categorisation.

ASIC says that when planned remediation is complete, more than 5000 members will have received more than $3.6 million in compensation.

“Merely providing disclosure and putting the onus on members to act is not enough to support good member outcomes,” ASIC Commissioner Danielle Press said.

“Given the low prevalence of smoking among Australian adults, classifying members as ‘smokers’ for insurance offered through superannuation unless the member takes active steps to confirm non-smoking status is contrary to community expectations.”

A Suncorp spokeswoman told insuranceNEWS.com.au that “all Suncorp superannuation members with group life policies have been on a smoker-neutral rate since February”.

She says that previously members were asked to confirm their smoker status at the time of transfer from their previous employer. This status was listed in their annual statements and also communicated with affected members via text, letter and telephone to confirm their information.

“A small number did not respond to these inquiries,” the spokeswoman said.

ASIC says the seven super businesses – AMP, Colonial First State, Equity Trustees, IOOF (including OnePath), Intrust, Netwealth, and Suncorp – have all stopped charging new members life insurance premiums at smoker rates by default and have moved, or are in the process of moving, existing members paying premiums at “smoker” rates by default on to non-smoker or blended rates.

Four refunded or agreed to refund members for the extra premiums paid because of the default classification.