Thirty-five per cent of super fund members who were aware of legislative changes to insurance in super chose to keep their life insurance, new research shows.

Yet more than half of the surveyed members (52%) hadn’t heard of the Protecting Your Super changes, underlining the limited impact of an industry-wide push to encourage fund members to retain their life insurance arrangements.

The MLC Life survey of 1000 Australians explored public engagement and understanding of the legislation, which removed life insurance from inactive accounts. Thirty-five per cent of those members who knew about the reform heard about it from their super fund.

Sixty-four per cent of respondents said they hadn’t heard of the reforms or remember anything about it. Among those fund members with life insurance, 44% hadn’t heard about the reform. And 70% of those who didn’t know about it say they would have liked the fund to have contacted them about it.

“Communications and campaigns by the Australian Government, media commentators, the financial services industry and superfunds appear to have limited cut-through,” the survey says.

Forty-one per cent of members took some form of action, and 30% of those contacted their super funds about the reforms. More than 70% of Australians hold life insurance in super.

Sixty-two per cent of super fund members thought the legislation was a good idea, and 43% thought the reforms increased trust in the financial services industry.

MLC worked with its Vision Super partner in a two-week calling campaign to members alerting them to the changes. Large numbers of super members opted to keep their life insurance as a result, says MLC Chief of Group and Retail Life Partners Sean McCormack.

MLC Life provides group insurance for MLC Super, Maritime Super, Energy Super, Qantas Super and others.

AIA also launched a national billboard, radio and online campaign with its super partners to encourage members to stop their “inactive” accounts being shut down.

Hundreds of thousands of super fund members have had their life insurance cancelled since the legislation was passed last month, with the Commonwealth Bank confirming to insuranceNEWS.com.au that about 12% – or 100,000 – members across Colonial’s super funds are no longer covered by insurance.

Deloitte estimates that 15-25% of super fund members may be affected.

The Government has since referred to the Senate Economics Legislation Committee its reintroduced Putting Members First bill to make life cover opt-in for under 25s or with low-balance accounts.

MLC is warning that the bill will lead to an insurance gap.

“As regulatory change reshapes the industry, life insurers and super funds must redouble their efforts to lift member engagement,” Mr McCormack said. “Our focus has been on improving the way technology is used to allow members to make changes to their cover simply, and to do so in a more transparent way.”

The bill is facing opposition from a broad range of organisations, including AIA, Australian Super, the Corporate Super Association (CSA), MetLife, First State Super, QSuper, Munich Re, TAL, Rest Super, AMP, the Financial Planning Association (FPA), the Association of Financial Advisers (AFA), and the Cancer Council.