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21-037MR ASIC commences civil penalty proceedings against Statewide Superannuation for misleading or deceptive correspondence
ASIC has commenced proceedings in the Federal Court against Statewide Superannuation Pty Ltd (Statewide), for false or misleading representations made about the insurance cover held by members of the Statewide Superannuation Trust (Fund). Statewide is the trustee of the Fund.
ASIC alleges that from May 2017 to June 2020, Statewide:
- sent annual statements and warning letters to approximately 12,500 Fund members, representing they held insurance cover at a time when those members did not have cover under a Statewide insurance policy; and
- deducted monthly insurance premiums (worth a total of approximately $1,500,000) from superannuation accounts of certain Fund members when those members did not have cover under a Statewide insurance policy.
ASIC alleges that in making these representations, Statewide breached its obligations as an Australian financial services licence holder to act efficiently, honestly and fairly and to comply with the financial services laws.
ASIC also alleges Statewide failed in its breach reporting obligation to report these breaches to ASIC within 10 business days.
ASIC is seeking declarations, pecuniary penalties, injunctions relating to a remediation program and publication orders.
The date for the first case management hearing is yet to be scheduled by the Court.
Statewide is the trustee and registrable superannuation entity licensee of the Fund. As at 30 June 2020, the Fund had approximately 153,204 members and $9.8 billion in total assets.
At the relevant time, Statewide maintained group life and income protection insurance policies where Fund members were eligible to be insured for death, total and permanent disablement and income protection. In or around May 2017, Statewide changed its superannuation administration system.
ASIC has identified superannuation trustee practices around insurance in superannuation as requiring improvement and has been working on a number of initiatives to improve practices (see MR 20-323). Where necessary, ASIC will use enforcement action to deter misconduct by trustees concerning insurance in superannuation.
If you have any questions or concerns about the status of insurance held through your superannuation, you should speak directly to your superannuation fund in the first instance.
The first case management hearing has been listed before Justice Besanko on 8 April 2021.
Editor's note 2:
On 8 April 2021, the Court ordered that the hearing listed to commence on 8 April 2021 be vacated. The matter has been listed before Justice Besanko for a case management hearing on 15 June 2021.