NAB’s wealth management superannuation funds trustee has been censured for a number of compliance issues around group life insurance policies.

Nulis Nominees Australia has been forced to appoint an independent expert to examine its compliance and risk management practices after the Australian Securities and Investments Commission (ASIC) took action.

NAB has appointed KPMG to conduct the review, with the first report due to ASIC and the trustee by July. It will cover risk management procedures, the process for implementing product changes, disclosure and reporting to members, and procedures for managing conflicts of interest, including the assessment of related-party service providers.

Problems arose when members of a number of NAB products were transferred to MLC MasterKey Business Super and MLC MasterKey Personal Super in 2012 and 2013, with changes to about 400,000 members’ total and permanent disability (TPD) cover.

ASIC found there was inadequate disclosure of insurance changes and inadequate training for staff, and insurance policies were not updated. As a result, incorrect death and TPD insurance tests were applied to fund members between May 2013 and July 2015. 

The bank says 10 members’ insurance claims were incorrectly assessed, with about $1.6 million in claims underpaid or declined.

NAB has compensated affected members $1.8 million, including interest. 

It has also identified more than 220,000 member accounts that were incorrectly charged fees for planned service of about $34.7 million between September 2012 and October last year.

The average compensation is expected to be $150 per member.