A voluntary code of practice for providing insurance within superannuation has come under fire for lacking teeth and rejecting stronger reforms.

The Insurance in Superannuation Working Group (ISWG) released the code’s final version before Christmas and says it will take effect from July.

Consumer group Choice says the latest version, released after consultations on a draft, strips the code of its enforceability and removes many protections designed to end erosion of accounts, particularly for young people.

“We’re deeply disappointed to see the industry back away from its commitments at the last minute,” Choice Campaigns and Policy Team Lead Xavier O’Halloran said.

“After a year of discussion, the industry is no closer to coming up with a set definition for what default life insurance within superannuation should cover.”

Maurice Blackburn Principal Josh Mennen says default insurance within super is a critical safety net and should be protected, but a voluntary code is inadequate.

“Everyone from consumers through to the Federal Government have made clear that they expected this process to deliver a binding code that would reform the industry, but that is not what the ISWG has delivered,” he said.

The code includes maximum payment expectations for automatically provided life cover and improved opt-out processes. It outlines measures to address unintentional payments for multiple policies and promotes better claims handling.

“This code helps automatic insurance function even better for members, as well as providing enhanced protections where members have decided to acquire ‘opt in’ life insurance cover through superannuation,” ISWG Chairman Jim Minto said.