Oversight of the Australian Financial Complaints Authority: Update to RG139 – Joint Submission

Submission to: Treasury
Submission recommends that kinship be included as a specific category in legislation as an option for a binding death benefit nomination. This area of superannuation is complex, and binding death benefit nominations can be ruled invalid for a number of reasons. People of Aboriginal and Torres Strait Islander descent are very clear about their kinship relationships but are not able to choose their appropriate beneficiaries because such relationships are not legally recognised.

The Financial Services Royal Commission recommended improvements in consumer protection for insurance claims handling. We support that recommendation and the draft legislation to implement it. The proposed changes will ensure that insurance claims are covered under the definition of “Financial Service” in the Corporations Act and improve disclosure when settling an insurance claim. This will be beneficial for people claiming on their insurance policies. Additional protections are needed in the proposed laws however, to protect people from exploitation, including extending the legislation to include paid claims handling services and life insurance. There should also be additional protections for people settling an insurance claim following a natural disaster.