Financial Services Council (FSC) says it broadly supports APRA’s proposed changes to the insurance in super framework, including changes responding to the financial services royal commission’s recommendations.
As part of the changes, trustees will require new independent certification for some insurance arrangements.
In its submission, FSC has sought clarification about the independent certification’s role and how it interacts with trustees’ best-interest duties.
FSC said “overall”, it was satisfied with the scope of the proposed changes but had highlighted some changes which required “either amendment or clarification”.
The FSC was concerned the revised standard had introduced several new terms, which had not been defined or explained.
FSC questioned APRA’s proposal the trustees should obtain independent certification that some arrangements were in the best interests of beneficiaries when it was trustees’ responsibility to make those assessments.
FSC suggested trustees might instead seek independent certification on aspects of “the nature of an insurance contract”, eg legal advice regarding the commercial terms.