Strong super code essential, but ISWG code misses the mark
18 December 2017
A super code of practice is an important and necessary step, but today's final code has missed the mark in delivering the robust reform needed for the industry, according to Maurice Blackburn Lawyers.
Maurice Blackburn Principal Josh Mennen said a code of practice was needed to ensure that the vital role of default insurance within super continued to work effectively, but today's code released by the Insurance in Super Working Group (ISWG) had missed an opportunity to deliver enforceable and binding change, and more work was needed to get the code right.
"Everyone from consumers through to the Federal Government have made clear that they expected this process to deliver a binding code that would reform the industry, but that is not what the ISWG has delivered,” Mr Mennen said.
“We agree with the ISWG that default insurance within super is a critical safety net for all Australians that must be protected, and it is evident that a code of practice is the obvious and necessary step needed to ensure that the industry is performing to the highest standard possible in delivering this.
“It is completely inadequate however to release a voluntary code as the ISWG have done today – we need a binding code with teeth, but instead what we have is the ISWG crossing their fingers that trustees will sign up to make the code binding and enforceable.
“That approach flies in the face of common sense and is at odds with the public’s expectations as well as what the ISWG set out to do, which was delivering a code that lifts obligations to meet consumer needs and expectations.
“The code also makes it clear that where there is inconsistency between the code and the law, the law prevails, and we don’t see that as being a reasonable basis for making this a voluntary code.
“Those involved in the drafting of this code have not heeded the messages being sent loud and clear on the standards expected, despite many within the industry, including lawyers, indicating repeatedly that they were supportive of strong reform.
“We look forward to seeing continuing improvements made to the code to ensure it can do the job that is required, and we hope that the ISWG will take on this feedback in ensuring that the code at last does deliver strong reform, including ensuring that any code is binding and enforceable,” he said.