ASIC targets Cbus trustee over alleged insurance claims delays
The Australian Securities and Investments Commission (ASIC) has launched civil proceedings against United Super Pty Ltd, the trustee for the Construction and Building Unions Superannuation Fund (Cbus).
ASIC alleges extensive delays and processing failures for death benefits and total and permanent disability (TPD) insurance claims.
The allegations span from September 2022 to November 2024, during which ASIC asserts that United Super did not meet its obligations to handle claims “efficiently, honestly, and fairly” as required under financial services regulations.
The trustee contracted Australian Administration Services Pty Ltd (AAS) to oversee claims processing; however, despite AAS’s reports about processing delays, ASIC alleges that United Super did not adequately assess or address the scope of the problem.
ASIC deputy chair Sarah Court noted the significant effect such delays could have on members awaiting financial support.
“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. 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,” she said.
By the end of 2022, more than 6,000 members had experienced delays of over 12 months – over half of Cbus’s claims at that time, according to Court.
“Extraordinarily, that equates to more than 50% of Cbus’ total claims at that time. We allege they are yet to completely rectify these issues,” Court said, emphasising that trustees must ensure adequate resources and oversight to support timely processing of claims for their members.
ASIC claims that United Super’s response to these delays, initiated in October 2022, was insufficient to address the issues at hand.
The matter was reportedly raised with Cbus’s Risk Committee between November 2022 and February 2023, but ASIC contends that the trustee failed to notify the regulator within the 30-day reporting window required by law.
When United Super later reported the issue in August and September 2023, ASIC alleges that these reports were misleading, including statements that the delays had been resolved when they had not.
ASIC is pursuing penalties, compliance orders, and adverse publicity orders. It alleges that United Super’s actions may have breached multiple provisions of the Corporations Act, including requirements for efficient claims processing, timely reporting of significant issues, and accurate disclosures to regulators.
