Protect Your Super Legislation

Hi everyone

Welcome back to the ‘Latest Happenings’ in Personal Insurance Claims. 

As promised, this month I will cover the absolute worst legislation ever… the ‘Protect Your Super’ (PYS) legislation of 1 July 2019, which lead to the cancellation of thousands of insurance policies held in super funds, often without the insured person even knowing about it. Think you used to have cover, but it’s not there now? This is probably why. Want to know why? Read on…

AFCA (Australian Financial Complaints Authority) put together a factsheet on PYS which outlines how you could have lost your insurance cover –

The super funds had to write to members that met these criteria, informing them that they would lose their insurances unless they “opted in”. The reason this was a terrible way to implement this legislation is because thousands, if not millions, of people have incorrect addresses / email addresses on their super accounts. Many people never received these notices. Instead, the legislation should have told people that had to “opt out” of insurance cover so that people who didn’t receive the notices did not lose insurance cover without knowing about it. As a former financial planner, I can say that advisers are not allowed to cancel a client’s insurance cover without a written letter signed by the client themselves.

There have been some truly disastrous outcomes for people who thought they had insurance cover, and then when they went to claim on it, found it had disappeared.

Unfortunately, AFCA cannot offer any help if the Trustee of the super fund followed the procedures outlined in the PYS legislation. The government made a really bad law, and innocent people suffered because of it. 

Download the full AFCA Factsheet here Superannuation complaints about PYS and insurance cover | Australian Financial Complaints Authority (AFCA)

Don’t forget to come back in June when I will be discussing the difference between default group policies held in super funds and retail policies (which can be held in or out of super, or a combination of both). You will pick up some good tips on ways to structure your insurance cover.