He did not comment when asked by ABC News whether these standards would include specific timeframes for super funds to respond to insurance claims, but said the government wanted to ensure “funds put member interests at the heart of service delivery”.<\/p>\n
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Daniel Mulino says “there have been some areas where some funds have fallen short”.\u00a0 (ABC News: Brett Worthington)<\/p>\n
Mr Mulino said Treasury had been working closely with consumer advocates, regulators and industry stakeholders this year to develop the service standards.<\/p>\n
The next step will be draft legislation for public consultation, but he did not say when that would be introduced.<\/p>\n
“While most funds offer services that meet or often surpass community expectations, there have been some areas where some funds have fallen short,” Mr Mulino said.<\/p>\n
“The new standards will improve how funds engage with their members and raise the bar for service.”ASIC wants claims handling times, processes improved<\/p>\n
Australia’s corporate regulator, ASIC, has also called for super funds to lift their game.<\/p>\n
The regulator has already taken legal action against Cbus over its handling of death and disability claims<\/a>.<\/p>\n In November, the superannuation giant faced a $23.5 million fine for the breaches<\/a> and agreed to pay out compensation.<\/p>\n Cbus cancels customer’s insurance days before his death<\/a><\/p>\n Just 18 days before Russell Wayne Hirst died of a cardiac event in November 2021, superannuation giant Cbus cancelled his insurance policy, leaving the beneficiary of his account in a year-long fight to have her claim approved.<\/p>\n ASIC has also called on superannuation funds to overhaul the way they deal with death benefit claims, noting excessive delays, poor customer service and ineffective claims handling<\/a> are leaving Australians worse off at some of the most vulnerable times of their lives.<\/p>\n ASIC commissioner Simone Constant said some funds had improved claims response times but the regulator had still seen mixed results in terms of how funds handled member claims.<\/p>\n She warned more super funds could face court action if they did not change their behaviour.<\/p>\n Simone Constant is calling on super funds to do better when it comes to processing disability insurance claims.\u00a0 (ABC News: John Gunn)<\/p>\n The regulator has warned super funds not to pass the buck and blame insurance providers for poor claims-handling conduct.<\/p>\n “Our message is really clear \u2014 they’re your members, this is a product that is operated and offered through your superannuation fund to your members, take accountability for that,” she said.<\/p>\n “If we see failure, if it looks and feels systemic \u2026 then absolutely super funds can expect this will be an area where we will use all our regulatory tools.”<\/p>\n Association of Superannuation Funds of Australia (ASFA) chief executive Mary Delahunty, whose members include the big super funds, said they were working to lift standards.<\/p>\n Ms Delahunty denied funds were outsourcing their obligations to the insurance companies, but said they did need to use insurers to handle claims.<\/p>\n “The way insurance works in superannuation is that the trustee buys a policy from an insurance provider and so that’s bought at a group level. So there’s always going to be two parties involved,” she said.<\/p>\n She noted ASIC data showed the average decision-making time on TPD claims was 3.6 months, and that 91.5 per cent of those claims are accepted and paid out.<\/p>\n But she said that “claims are and will continue to be complex sometimes, and they can take some time to decide”.<\/p>\n Mary Delahunty says super funds are making improvements to claims processes and times.\u00a0 (ABC News: Paul Pandoulis)<\/p>\n Mental health, language barriers can complicate claims<\/p>\n Because of the complexity of cases, often some can drag out for months or even years.<\/p>\n Many individuals reached out to ABC News about their ordeal but were unable to go on record due to the emotional toll their ongoing TPD claim disputes had had on them.<\/p>\n Some had suffered sexual violence, causing post-traumatic stress disorder. Many faced ongoing mental health struggles, which according to recent data reported by ABC News, has become one of the most common reasons for claims.<\/a><\/p>\n Insurers under pressure as mental health claims soar<\/a><\/p>\n Experts say Australia is reaching a “tipping point” as mental health insurance claims surge, raising criticisms that super funds and insurers may be dragging out payouts for people with a mental illness.<\/p>\n Ms Constant said approaches to death and disability claims were “inconsistent” between funds.<\/p>\n “You don’t want somebody making a claim to need to touch base multiple times to provide information. Expectations should be clear and well communicated up front.<\/p>\n “And it’s particularly difficult, for example, if there is a language barrier or perhaps a geographic barrier.<\/p>\n “This is common across member services issues and particularly claims process issues, if you’re from a First Nations or first language other than English background.”<\/p>\n Xavier O’Halloran, CEO of Super Consumers Australia, said some funds had put more stringent conditions on particular types of claims.<\/p>\n “In some cases [the funds are] requiring people to have active specialist care in order to make, say, a mental health claim, in cases where people just simply can’t afford access or don’t have access to those types of services in their area,” he said.<\/p>\n “They’ve been introducing stricter and stricter terms \u2026 for how you prove that you’re mentally unwell.<\/p>\n “In some cases, these terms are leading to people not being able to make a successful claim.”<\/p>\n Xavier O’Halloran wants to see super funds respond to insurance claims in a more timely manner.\u00a0 (ABC News: John Gunn)<\/p>\n Mr O’Halloran noted that when super funds put up unnecessary barriers and continued to ask people for information they had already been provided, or draw out claims, it had real economic impacts on people’s lives.<\/p>\n “And it impacts people’s mental health, to be drawn out that long in a claims process with no certainty in sight as to whether they’re going to be successful,” he said.<\/p>\n On mental health claims, Ms Delahunty highlighted a 732 per cent increase in people aged between 30 and 40 making claims over 10 years.<\/p>\n “Adding that on to what super funds and insurers are already dealing with means that the system is under some strain,” she said.<\/p>\n “But we are making significant improvements.”<\/p>\n Requests for ‘irrelevant’ information drag claims out<\/p>\n Insurance claims advocate William Johns acknowledged disability claims were often complex cases but said the process could drag out for months, or more than a year, often because funds requested additional information.<\/p>\n<\/p>\n
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