Home / Life Insurance / $3.6 million ‘smoker’ premiums to be refunded
10 August 2020
At least 5000 superannuation fund members will collectively receive more than $3.6 million in compensation after they were wrongfully charged higher “smoker” premiums for life insurance, the Australian Securities and Investments Commission (ASIC) says.
Over three years, ASIC has engaged with seven superannuation businesses that had at some time assigned members to “smoker” status unless they took active steps to opt out.
ASIC says the seven businesses – AMP, Colonial First State, Equity Trustees, IOOF (including OnePath), Intrust, Netwealth, and Suncorp – have all stopped charging new members life insurance premiums at smoker rates by default.
All have moved, or are in the process of moving, existing members paying premiums at “smoker” rates by default on to non-smoker or blended rates and four refunded or agreed to refund members for the extra premiums paid because of the default classification.
ASIC Commissioner Danielle Press says that the low prevalence of smoking among Australian adults means classifying members as ‘smokers’ for insurance offered through superannuation unless the member took active steps to confirm non-smoking status is “contrary to community expectations”.