Five major superannuation industry peak bodies have pledged to usher in a binding code of conduct to improve group insurance standards by the end of 2017.
A coalition of five different super industry groups, representing both the retail and non-profit factions, released a joint statement on Wednesday to formally announce the establishment of a working group to develop a binding code of conduct to lift group insurance standards.
The statement said it was intended the resulting code of conduct would be “binding, enforceable and contain mechanisms for independent administration and monitoring to enhance consumer protections”.
A target has been set to finalise the code before the end of 2017.
“However, improvements to industry practice will be progressively delivered throughout 2017,” the statement said.
The initiative is a collaboration between the Australian Institute of Superannuation Trustees (AIST), the Association of Superannuation Funds of Australia (ASFA), the Financial Services Council (FSC), the Industry Funds Forum (IFF) and Industry Super Australia (ISA).
It is understood the chief executives of the five industry groups will next meet on Monday.
Representatives from funds, insurers, consumer groups and industry bodies will participate in the working group.
The establishment of the working group, and its promise to deliver a new code of conduct by December 2017, follows a “statement of intent” released by the stakeholders in early October.
With life insurers and financial advisers facing increased scrutiny, super funds are under pressure to show the group policies their members are placed in by default offer good value.
At an AIST forum in Melbourne last week senior executives from the Australian Securities and Investments Commission (ASIC) warned super fund trustees they expected to see them “take a proactive approach” to improve group insurance standards.
In the face of recent criticisms about failures in group insurance it is not surprising the super industry is keen to get on the front foot, and talk up the benefits of the system.