A woman who posted a signed form opting in to insurance despite having a low superannuation balance cannot make a disability claim because her fund’s trustee says the declaration did not arrive.

The Australian Financial Complaints Authority says it is “satisfied on balance” that the complainant sent the form, but it finds trustee Nulis Nominees correctly cancelled her death and total and permanent disability cover because it never received it.

However, when the complainant – who says she is suffering “a life sentence” of disabilities – argued she did not receive a letter from the fund stating her cover was cancelled, AFCA took a different view, saying there is no obligation to make sure it was received.

The complainant joined the super fund in September 2019. Law changes from April 1 2020 prevented trustees from providing insurance where the balance was below $6000, unless the member elected to keep it. 

The trustee wrote to the woman warning of the pending cancellation and included a form she could fill in to retain the cover.

The complainant received this letter and filled in the form. She provided dated photographs of the form and told AFCA she sent it back by ordinary post. She said “with the talk of covid” at the time, she did not want to “mix with people in shops”, so opted against registered post.

“I am satisfied on balance that the complainant posted the signed opt-in form to the trustee by ordinary post,” an AFCA ombudsman said.

But the trustee told the ombudsman it had no record of receiving the form.

“It is very difficult to prove a negative, such as the trustee’s claim it did not receive the complainant’s opt-in form,” the ombudsman said.

“In its submissions, the trustee has described its administration system and the way in which it tracked the dispatch of letters to the complainant. 

“I am satisfied, on balance, that administration system would have recorded the receipt of the complainant’s opt-in form, had the trustee received it.

“As the trustee did not receive an election in writing from the complainant to keep her insurance cover by March 31 2020, the trustee was required by law to cancel the insurance cover.”

The complainant said she never received a letter confirming the cancellation of cover and giving her the option to reinstate it, but the trustee provided a screenshot of its administration system to show the letter had been posted.

“On balance, I am satisfied the trustee sent this letter to the complainant,” the ombudsman said.

“The trustee does not have an obligation to ensure the letter was received by the complainant.”

AFCA issued a recommendation last year in favour of the trustee, but the complainant, who wants cover reinstated os she can lodge a claim, explained she wanted to fight on to a full determination.

“I have a life sentence of so many disabilities and disadvantages, something that TPD insurance is supposed to assist with. However, in my case, they are doing everything possible to get away from their responsibility as an insurer.”

AFCA’s ombudsman says the trustee has complied with the law, the insurance policy and the trust deed. 

“In her submissions to AFCA, the complainant has described her medical condition. I am sympathetic to her situation, which appears to be very distressing, but AFCA’s role is limited.”

See the full ruling here.