The start date for the government’s reintroduced insurance-in-super bill should be delayed by two months, a Senate report says.

The Economics Legislation Committee has been examining the government’s proposed bill to make life insurance opt-in for under 25s or members with less than $6000 in super. It was due to start on October 1.

Numerous industry funds and insurers have demanded a much longer delay to the commencement of the legislation. AIA says the two-month transition period between the bill being passed and implemented “borders on reckless”.

The Committee has recommended the bill be adopted without changes despite multiple insurers and super funds raising concerns about the impact it would have on low-income workers and those in high-risk occupations who may not be able to source insurance elsewhere.

In the report, the Committee acknowledges these concerns but reminds stakeholders that the bill doesn’t prevent fund members from choosing to opt in to insurance, and there are existing support mechanisms to assist those who are injured or unable to work.

Default insurance needs to be “mindfully designed to suit a majority of the population's needs; not simply a small minority. For instance, an overwhelming majority of people under the age of 25 do not have dependants and should be given the opportunity to make an active decision as to whether insurance is something they want financially,” it says.

“Based on the extensive consultation on the issues raised in the bill during the current and prior inquiries, the bill strikes the right balance for all concerned,” it says.

The Committee also supports the Productivity Commission’s recommendation to have an inquiry into the effectiveness of insurance-in-super as soon as practically possible.

Hundreds of thousands of super fund members have had their life insurance cancelled since the previous Protecting Your Super legislation was passed last month, with the Commonwealth Bank confirming to insuranceNEWS.com.au that around 12% – or 100,000 – members across Colonial’s super funds are no longer covered by insurance. Media reports quote Deloitte estimates that 15-25% of super fund members may be affected.