BT Financial Group (BT) has announced it will fully adopt the Insurance in Superannuation Voluntary Code of Practice (the Code) for superannuation trustees and implement the new standards.
BT General Manager, Superannuation, Melinda Howes said BT strongly supports the objectives of the Code, which seek to improve outcomes for members with insurance cover through their superannuation fund.
"As a founding member of the Insurance in Superannuation Working Group, we have worked through the Code in detail and believe implementing the Code is the right thing to do for super fund members.
"It’s important that super funds adopt these standards. We also support further industry-led initiatives to make the Code binding to ensure all members get the benefit of these additional protections," Ms Howes said.
BT acknowledges that the Code will give rise to complex implementation considerations which will need to be worked through in order to ensure that it does not result in unintended consequences for the super fund members it is aimed at protecting.
BT is particularly mindful of the situation where, under the Code, a member’s insurance cover may be automatically cancelled if no superannuation contributions are made to their account for 13 months. A member taking a career break may find it difficult to re-instate their default cover when returning to work.
"The reality is that premium cessation and the resulting potential loss of valuable insurance cover for people taking extended leave will predominantly affect women with parenting responsibilities. A person may be on parental leave for up to two years but insurance cover may be cancelled after 13 months of no super contributions to their account. It’s important that anyone who has taken a break from the workforce can regain access to their default insurance cover," Ms Howes said.
"It shouldn’t be beyond the industry’s ability to resolve these and other issues to ensure that the Code does not leave members worse off," Ms Howes said.
BT General Manager, Insurance, Sue Houghton said BT Life Insurance was supportive of the measures contained in the Code to drive further improvements across the insurance industry.
"The Code will help to ensure the right balance between providing adequate insurance cover and protection of members’ superannuation savings for retirement," Ms Houghton said.
"We support the Code and believe it will further help Australians gain access to appropriate and affordable cover and make better informed decisions about their insurance in superannuation," Ms Houghton said.
Media release download (PDF 196 KB)