Life Insurance in Superannuation: AFCA lacked the authority to determine a “complaint relating to superannuation” which falls outside the ambit of sub-ss 1053(1)(a)-(j) of the Corporations Act 2001 (Cth)

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By David Slatyer, Partner & Nica Manosca, Lawyer

In the decision of the Full Court of the Federal Court (in Sydney), which was published on 27 October 2022, the Court decided that AFCA’s authority to determine a ‘complaint relating to superannuation’ (per s1053 of the Corporations Act 2001 (Cth)) is limited to those categories of complaint specifically set out in ss1053(1)(a)-(j), and not otherwise.

Rule B.2.1(e)(i) of the AFCA Rules provided that “A complaint (other than a Superannuation Complaint) must arise from or relate to…a legal or beneficial interest of the complainant arising out of…a financial investment (such as life insurance, a security or an interest in a managed investment scheme or a superannuation fund).” If a complaint is one relating to superannuation, it can only be brought within AFCA’s jurisdiction if it falls within the ambit of subsections 1053(1)(a)-(j) of the Corporations Act.

Despite the superannuation fund member’s complaint to AFCA (about a Total and Permanent Disablement decision) being made outside the 2-year limitation period pursuant to rule B.4.1.1 of the AFCA Rules, AFCA purported to exercise a discretion to accept it under its general jurisdiction.   None of the categories of superannuation complaint specifically set out in ss1053(1)(a)-(j) relate to such a decision of an insurer.

AFCA went on to determine the complaint and decided adversely to the fund insurer, MetLife.

As a result, MetLife brought proceedings against AFCA in the Federal Court, seeking a declaration that AFCA lacked authority to determine the complaint. The Federal Court at first instance dismissed the proceeding.

MetLife then appealed to the Full Court.

A ‘superannuation complaint’ is defined in s1053 to include a ‘complaint about an insurer’s decision under a policy held by a trustee of a RSA…(i) if the time limits in rule B.4.1.1 have been met… (ii) otherwise be considered as a non-superannuation complaint against the insurer.’

The court noted the complainant could have made a complaint against the superannuation trustee as per section 1053(1)(a), and the life insurer could then have been joined as per section 1054(1), but this did not occur in this case.

The Full Court therefore upheld MetLife’s appeal.


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