Cbus fined $24m for delayed insurance claims
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The news: Cbus Super has been fined $23.5 million by the Federal Court of Australia following mediation with ASIC on delayed processing of insurance claims.
The context: Cbus said that it established a reserve to pay the penalty, which has been accounted for in its financial accounts. It will not be increasing fees to cover the penalty.
Cbus and ASIC jointly submitted to the court to pay the civil penalty in late October. At the time, Cbus estimated it would pay $32 million in compensation to 7402 people.
In a statement, Cbus said it has paid compensation to “almost all affected members, their families and claimants”.
Cbus said it has doubled staff numbers in its claims team and established specialist units. Other reforms will help reduce processing times for the average death claim by about four to six weeks, according to Cbus.
A new simplified process for death benefit payments will commence on 1 December 2025.
At the start of October, Cbus settled a dispute with its customer service administrator MUFG Retirement Solutions relating to the delays. Over the past year the two companies have since implemented reforms to "streamline claims handling and payment services", according to Cbus.
ASIC began proceedings against Cbus in November 2024, alleging that death benefits and total and permanent disability insurance claims were taking more than 90 days to be processed.
The sources: Cbus media release, Cbus media release, The Sydney Morning Herald
