The Law Handbook 2024

418 Section 5: Managing your money the trustee. It may instead allow the trustee to make the decision again. In practice, very few of these cases go as far as a court hearing. Almost all are settled by agreement before trial. An experienced solicitor can advise you on the likelihood of your case being settled. Review by the Australian Financial Complaints Authority Complaints about superannuation and insurance can be made to the Australian Financial Complaints Authority ( AFCA ). There are some exclusions. AFCA can only deal with complaints about certain types of general insurance policies. AFCA cannot deal with complaints about: • workers’ compensation insurance; • the level of an insurance fee, premium, charge, rebate or interest rate – unless the complaint concerns the non-disclosure, misrepresentation or incorrect application of a fee, or a breach of any legal obligation or duty by the insurance firm; • decisions to refuse to provide insurance cover; except where: – the complaint is that a decision was made indiscriminately, maliciously or on the basis of incorrect information, – the complaint is that the complainant was misinformed about the insurance cover, or – the complaint relates to a medical indemnity insurance product; • underwriting or actuarial factors leading to an offer of a life insurance policy on non-standard terms; • rating factors and weightings an insurer applies to a general insurance policy to determine the insured person’s (or proposed insured person’s) base premium that is commercially sensitive information. AFCA can deal with claims up to $1 085 000. For claims relating to an income stream (e.g. income protection insurance), AFCA can deal with claims relating to policies paying up to $14 500 per month. AFCA has a compensation limit of $542 500 per claim (except for superannuation and some other matters), plus interest and limited costs. For a complaint relating to superannuation, AFCA must affirm a decision, if it is satisfied that the decision is fair and reasonable in all the circumstances. Other AFCA decisions are based on what is fair in all the circumstances, considering: • legal principles; • applicable industry codes or guidelines; • good industry practice; and • previous relevant decisions made by AFCA or its predecessors (e.g. the Superannuation Complaints Tribunal). This is different to the approach applied in a court. If AFCA decides in favour of the financial firm, the complainant is not bound by the decision. The complainant retains the right to take the complaint to court. For information about how to prepare to submit a complaint, see AFCA’s website at www.afca. org.au/make-a-complaint/complain. Reviewing an insurer’s decision Some funds provide insured benefits to members. Whether a member is entitled to the insured benefit depends both on the terms of the trust deed and on the terms of the insurance policy. The definition of ‘total and permanent disablement benefit’ or ‘total disablement’ (for income protection or salary continuance benefits) differs from fund to fund and policy to policy. It is vital to look at the definition in question, as noted above. Often, a total disablement benefit is payable if a member is unable to do the member’s own job from month to month, but a total and permanent disablement benefit is payable only if the insurer determines that the member is unlikely to return to employment. In these cases, the trustee has no power to determine whether a member is entitled to the insured total and permanent disability benefit. If the insurer’s decision is challenged in court, the court must decide whether the insurer, in deciding whether a member is entitled to a total and permanent disability benefit, has acted reasonably, in good faith, and with due regard for the interests of the member. If the insurer has so acted, the court cannot set aside the decision of the insurer even if it considers that, if the court were to make the decision, it would have found that the member was entitled to disability benefits. On the other hand, if the insurance contract provides for benefits to be paid if the member is unlikely to return to employment (and not only if the