Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.9 - FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE AND SALE OF FINANCIAL PRODUCTS  

Division 5 - Ongoing requirements for product disclosure after person becomes a member  

Subdivision 5.8A - Information in relation to inactive superannuation accounts  

REGULATIONS 7.9.44B NOTICES ABOUT INSURANCE - INACTIVITY  

7.9.44B(1)    
This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Application

7.9.44B(2)    
This regulation applies if:

(a) a member of a regulated superannuation fund holds a choice product or a MySuper product offered by the fund; and

(b) the fund provides a benefit to, or in respect of, the member under the product by taking out or maintaining insurance; and

(c) the member has not made an election, under subsection 68AAA(2) of the SIS Act, that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance even if the member ' s account is inactive in relation to the product for a continuous period of 16 months; and

(d) if under the governing rules of the fund the benefit will not be provided to, or in respect of, the member under the product by taking out or maintaining insurance if the member ' s account is inactive for a period of less than 16 months - the member has not made an election under the governing rules of the fund that the benefit will be provided in that way even if the member ' s account is inactive in relation to the product for that lesser period.

7.9.44B(3)    
However, this regulation does not apply in relation to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015 ); or

(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992 , a chosen fund for contributions for the person ' s superannuation by the Commonwealth; or

(d) a member to whom the employer-sponsor contribution exception applies under section 68AAE of the SIS Act.

Insurance inactivity notices

7.9.44B(4)    
Each trustee of the regulated superannuation fund must ensure that the member is given an insurance inactivity notice in relation to the benefit for each occasion on which one of the following paragraphs is satisfied:

(a) the member ' s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member ' s account to continue to be inactive in relation to the product for a further period of 7 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(b) the member ' s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member ' s account to continue to be inactive in relation to the product for a further period of 4 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(c) the member ' s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member ' s account to continue to be inactive in relation to the product for a further period of 1 month, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act.

7.9.44B(5)    
For the purposes of subregulation (4), an insurance inactivity notice in relation to the benefit is a notice in writing given to the member:

(a) stating the length of the continuous period for which the member ' s account has been inactive in relation to the product under which the benefit is provided; and

(b) explaining that the member ' s account will be active in relation to the product if an amount, such as a contribution, is paid into the account; and

(c) stating the date on which, if there is no activity, the benefit will cease to be provided; and

(d) stating:

(i) the amount of insurance fee charged in relation to the product for the fund ' s most recent completed year of income; and

(ii) the amount of insurance fee likely to be charged in relation to the product for the fund ' s current year of income; and

(e) explaining whether the benefit will cease to be provided:

(i) under the governing rules of the fund; or

(ii) because of the application of section 68AAA of the SIS Act; and

(f) setting out:

(i) whether or not it is possible for the member to elect to continue to be provided the benefit; and

(ii) if it is possible for the member to do so - the method by which the member can make the election.

Time for giving notice

7.9.44B(6)    
If a trustee of a regulated superannuation fund is required under subregulation (4) to ensure that a member of the fund is given a notice in relation to a benefit provided to the member under a product offered by the fund, the notice must be given:

(a) if paragraph (4)(a) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied; and

(b) if paragraph (4)(b) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied; and

(c) if paragraph (4)(c) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied.