Today the Morrison Government released a consultation paper inviting stakeholder submissions on occupational exclusions in default insurance offered through MySuper products.
The consultation is to inform a review into occupational exclusions in default insurance in MySuper products, with a view to determining the appropriateness of such exclusions going forward. The Treasury review delivers on the Morrison Government’s commitment made on 16 June 2021.
Occupational exclusions mean that default insurance cover is not available (or only partial cover is available) for certain occupations that an insurer has classified as higher risk. Occupational exclusions in default insurance policies affect the automatic acceptance of default cover for some new MySuper members and may also have significant consequences where a member changes occupation.
The review will focus on default cover in respect of life and total and permanent disability insurance which trustees are required to provide to their MySuper members.
The objective of the consultation is to canvas views from interested parties on the extent of the problem arising from occupational exclusions for new members and for members changing jobs and what options, if any, may be required for changes to the current regulatory framework.
Default insurance offered through MySuper products should come with no surprises. This review will look at the prevalence of occupational exclusions on default life and TPD insurance offerings within MySuper products to form a view of whether occupational exclusions in relation to default life and TPD insurance in MySuper products are necessary or appropriate.
The consultation paper is available on the Treasury website.
Submissions are invited by 14 October 2021 and can be sent to email@example.com.