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Super funds seek separate claims reform treatment

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The Association of Superannuation Funds of Australia (ASFA) supports proposed claims handling reforms but says the sector should be viewed differently from other insurance providers.

Significant regulatory and statutory obligations and oversight already apply to super, ASFA says in a Treasury submission.

“These existing obligations and the potential for the new measure to overlap with them need to be taken into account in determining the application of claims handling as a financial service to superannuation trustees,” it says.

Treasury is consulting on a Hayne royal commission recommendation to remove the claims handling exclusion from the financial service definition.

The change would allow the Australian Securities and Investments Commission to enforce a higher standard of behaviour and require claims to be handled “efficiently, honestly and fairly”.

ASFA says any reforms need to be applied so they are consistent across various super business models, while groups that don’t hold a financial services licence shouldn’t have to obtain one “for the sole purpose of satisfying this claims handling obligation”.

The submission stresses that claims handling should not be caught up in rules related to providing advice – a risk already identified in the consultation paper.

ASFA offers to form a consultation group to help the corporate regulator ensure reforms are adapted to the super environment and efficiently achieve their purpose.