The Federal Government is targeting automatic payment of life and disability insurance premiums under proposed superannuation reforms.

Financial Services Minister Kelly O’Dwyer says Canberra has tasked the Australian Prudential Regulation Authority with making it easier for consumers to opt out of policies provided with super.

It is part of a range of reforms, which also include strengthening default MySuper products to ensure investment and insurance strategies meet members’ financial interests.

Annual member meetings would be introduced to make super providers more accountable, while funds would have to be more transparent in reporting on fees and spending under the reforms.

Super fund directors who breach their duties would be subject to the same civil and criminal penalties as directors of ordinary managed investment schemes.

A draft bill and explanatory memorandum outlining the proposed changes have been published on the Treasury website for comment. Submissions close on Friday August 11.

The Productivity Commission is also examining group insurance arrangements as part of its inquiry into the super system’s efficiency and competitiveness.

“The Government will consider if any further changes to improve the superannuation system are required in light of any recommendations made by the Productivity Commission,” Ms O’Dwyer said.

The Financial Services Council says it supports all the proposals, including making it easier for people to opt out of cover inside super.

But it notes group life insurance provides a valuable safety net that delivers benefits very efficiently for millions of Australians, and consumers need to understand the ramifications of opting out.

“The FSC strongly supports all proposals that give consumers more power and greater transparency over one of their most important assets – their superannuation savings,” CEO Sally Loane said.