The third tranche of the MySuper regulations has been introduced to Parliament.

The bill will require super funds to provide life insurance and total and permanent disability cover on an opt-out basis.

In a MySuper product, the insurance fee can be charged only on a cost-recovery basis to the member.

The fees must cover only the cost of providing actual cover, excluding capital investment costs incurred by the insurer.

The legislation states the responsible entity of a MySuper product will be banned from paying premiums of a life policy if it has embedded commissions for a financial adviser.

Financial Services Minister Bill Shorten says the rules will ensure MySuper members do not pay unnecessary fees.

“The opt-out is an important safety net to members of MySuper who may not actively consider their insurance needs,” he said.