The Australian Financial Complaints Authority (AFCA) has upheld the decision made by a trustee to cancel the insurance of a fund member as mandated by law, after her account became “inactive”. 
 
AFCA says under Protecting Your Superannuation reforms that commenced in July 2019 the trustee was required to terminate the woman’s death and total and permanent disablement (TPD) insurance cover after no contributions were received for 16 months. The woman died in January last year. 
 
Motor Trades Association of Australia Superannuation Fund cancelled the cover on December 8 2021 since no contributions had been received since August 17 2020 – which meets the legislation’s 16-month requirement for an account to be termed inactive. 
 
The trustee says it had advised the deceased her insurance was going to be cancelled but did not receive a contribution or opt-in notice from her. 
 
However, her husband disputed the trustee’s decision and lodged a complaint. He says his late wife received emails from the trustee after she was transferred to the fund but did not act upon them as she thought they were a scam. 
 
His wife, he said, had previously contributed to stop an earlier cancellation of her cover when it was in the former fund. She became a member of the current fund after a Successor Fund Transfer (SFT) in April 2021 and the trustee remained the same. 
 
He wants the trustee to pay the deceased’s death insurance amount but AFCA affirmed the decision of the trustee. 
 
“The trustee was required to cancel the deceased’s insurance cover,” AFCA says in its ruling. 
 
AFCA says it reviewed the trustee’s letters and it is “satisfied the deceased was advised her insurance was going to be cancelled on December 18 2021 and what she could do to retain the insurance”. 
 
“The trustee did not receive any instructions from the deceased or a contribution to her account 
prior to this date,” the AFCA ruling says.  
 
AFCA says it was “very unfortunate” that the deceased did not access her insurance inactivity online notices through an “abundance of caution”. 
 
But AFCA says if she thought the emails were a scam, she could have or should have contacted the trustee to verify them. 
 
“Had she done so, the trustee would have or should have verified the validity of the emails,” AFCA says. 
  
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