Time is up on bad customer service at super funds

Super Consumers Australia says ASIC’s court action against Cbus for long insurance claims handling delays highlights the urgent need for the Federal Government to mandate member service standards.

“Making a death benefit or TPD insurance claim is an incredibly stressful and critical moment in someone’s life,” said Susan Quinn, Advocacy Manager.

“Huge delays like the ones reported at Cbus double down on the anxiety and can force people to struggle with their day-to-day living costs and debts.”

There are no specific legal standards or timeframes for super funds handling their members’ insurance claims. 

“We welcome this important test case for ASIC to see if the law is protecting people when they are most vulnerable. 

“ASIC is alleging Cbus breached a very broad legal duty here. That ambiguity doesn’t give comfort or certainty to people at the toughest times of their lives. 

“There’s a clear lack of leadership in the super sector on this widespread problem. We are now calling on the Government to mandate standards for super funds’ member services like claims handling.”

“It’s critical that the Government steps in on behalf of millions of Australians. The Assistant Treasurer has told funds to lift their game, but we’re still waiting. Mandatory standards will make it very clear how long super funds have to decide a claim, and how they should treat people in the process.”

Regulators have been collecting data on how individual super funds are handling insurance claims but have failed to make this data public.

“People have no idea which funds are better than others when it comes to insurance claims and disputes. It’s a crucial function of super funds and yet we’re all left in the dark. We’re again calling on APRA and ASIC to shine a light on which funds need to step up for their members.”

“Mandatory standards plus public accountability are the only way to stop the distressing experiences we hear about so often.”

“Cbus needs to explain this mess. The fund has over 900,000 members and, as a default, their members pay for insurance. In its marketing material Cbus says its insurance is tailored to meet the high-risk working conditions of people working in construction and allied industries, yet ASIC alleges that an extraordinary 50% of payments were delayed by more than 12 months. Their words and actions are completely out of whack.”