Life insurance payments from a dead member of a MySuper product can be held in an investment option until distribution to beneficiaries, the Australian Prudential Regulation Authority (APRA) says.

“Insurance proceeds are not a contribution in respect of the member,” the regulator said in response to calls for clarification from the financial services sector. “It is a payment by the insurer to the super fund licensee, which is then allocated to the non-member beneficiaries.”

APRA says proceeds can be held in a MySuper product or another fund until final distribution.

In response to separate queries on registration fees for MySuper products, APRA says it will not levy charges for processing applications.