A A$52bn industry superannuation fund admitted to inadvertently breaching the rules in a report filed with ASIC. The misconduct involved REST continuing to deduct insurance premiums when a person was no longer covered by insurance.
The superannuation fund REST admitted the wrongdoing over its handling of group insurance after appearing before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. REST has more than two million members.
REST’s admission also included informing ASIC of 184 contraventions of the SIS Act since 15 March 2017, for failing to provide reasons for a decision in response to a complaint about the proposed payment of a death benefit.
The revelation comes after AMP, Australia’s largest wealth manager, admitted to charging A$1.3m in premiums for life insurance to more than 4,600 superannuation customers it knew had died, and admits the number of cases could be higher.
AMP is not the only major Australian company to admit to charging dead client accounts. Commonwealth Bank of Australia and National Australia Bank, the nation’s biggest and fourth-biggest lenders, have told the inquiry they engaged in similar practices.
The powerful inquiry, which can recommend criminal prosecutions and tougher regulations, is set to continue its investigation into the insurance sector, after having already found widespread wrongdoing in the consumer credit, rural lending, small business banking and pension sectors.