Australian Securities and Investments Commission blasts Cbus over alleged insurance claim delays

The Federal financial services regulator has accused giant industry super fund Cbus of having systematic delays in insurance claims for disabled or dead members.

The Australian Securities and Investments Commission alleges that more than half of the Cbus claims — totalling around 6000 members — had been delayed for more than 12 months by the end of 2022.

ASIC said members and other claimants could be up to $20 million out of pocket because the fund regularly took more than 90 days to process members’ death and disability claims.

ASIC launched a Federal Court action alleging Cbus trustee United Super failed to act efficiently, honestly and fairly in handling claims for death benefits and payouts under total and permanent disability policies.

ASIC deputy chair Sarah Court said it was a super fund trustees’ responsibility to ensure there was adequate supervision of claims handling systems, even if they had outsourced claims handling to external providers.

“Delays in claims processing like those alleged by ASIC cause real harm to families who may be relying on the payments to meet critical expenses.,” Ms Court said.

“This adds to difficult personal circumstances, whether grieving for a loved one or dealing with severe injury or illness.

“The additional anxiety and pain these delays caused compounded the issues these members and their families faced.”

In its statement, ASIC said United Super failed in it duties from September 2022 until this month, claiming the super fund manager still had not rectified its claims handling problems.

ASIC said United Super’s response in October 2022 was inadequate and it failed to report the matters to ASIC despite the issues being pointed out to the Cbus risk committee from November 2022 to February 2023.