ASIC alleges Cbus claims failures impacted more than 10,000 fund members
Make us a preferred source
Make us a preferred source on Google
More news: In a media release, ASIC has alleged that more than 10,000 Cbus members were impacted by death benefits and total and permanent disability (TPD) insurance claims taking more than 90 days to be processed.
ASIC's civil penalty lawsuit alleges that despite receiving reports from its third-party administrator, Australian Administration Services, United Super failed to properly assess the scale of the impact to members and claimants. The financial loss has been estimated by Cbus to be $20 million to members and claimants.
ASIC has also alleged that despite the matter being brought to the attention of the Cbus Risk Committee between November 2022 and February 2023, United Super failed to report these issues to ASIC as required within 30 days of becoming aware of them.
Finally, ASIC alleges that United Super failed to take all reasonable steps to ensure that when the matter was reported to ASIC in August 2023 and September 2023, those reports were not materially misleading when they reported the contravention was not ongoing, among other matters.
What they said: ASIC Deputy Chair Sarah Court said, "By late 2022, more than 6,000 Cbus members and claimants had their payments delayed by more than 12 months. Extraordinarily, that equates to more than 50% of Cbus’ total claims at that time. We allege they are yet to completely rectify these issues."
ASIC sues Cbus in Federal Court over insurance claims complaints
The news: The Australian Securities and Investments Commission (ASIC) has taken legal action against United Super as a trustee for industry fund Cbus over complaints, according to public court filings.
The context: The corporations lawsuit was filed before the Federal Court of Australia on Tuesday afternoon. ASIC has engaged Holding Redlich as its lawyers in the matter.
Cbus told Capital Brief that it was "sorry that delays have been experienced in the processing of insurance claims made by our members".
The superannuation fund said it had established a compensation program for affected members.
ASIC’s legal action comes two days ahead of its annual forum in Sydney and follows orders from the Australian Prudential Regulation Authority (APRA) in August for United Super to conduct a spending review over concerns linked to Cbus, and additional licensing conditions on United Super as trustee.
The orders came after reports into alleged misconduct at the Construction, Forestry and Maritime Employees Union (CFMEU) and concerns over the union’s influence on the industry fund.
What they said: "Regrettably this has added to the distress of members and their families. We apologise to our affected members and their families without reservation and promise to do better," Cbus said.
"Cbus has implemented a number of measures that are reducing delays and is committed to further improving management of insurance claims.
"Cbus has established a compensation program for affected members which is being implemented now.
"... Cbus will invite ASIC to engage in alternative dispute resolution processes to avoid protracted litigation."
The source: Federal Court of Australia
