AFCA Determination: Financial Services Partners Pty Limited to Compensate Client for Lost Life Insurance Cover

‍Case Number: 12-00-991416
Date: 23 August 2024

A recent AFCA determination has found in favour of a complainant who lost life insurance cover due to the inaction of Financial Services Partners Pty Limited and its authorised representative, Ms E.

Background

The complainant held two life insurance group covers totalling $645,480 within his superannuation. In May 2020, these policies were cancelled under the Protecting Your Super (PYS) legislation, as no contributions had been made since 2018. Crucially, the complainant’s address was not updated with the superannuation trustee, meaning he did not receive opt-in notifications to retain his cover.

Ms E failed to update the complainant’s address in February 2020, resulting in the loss of cover. The financial firm accepted partial responsibility, acknowledging that Mr P would struggle to secure comparable insurance due to ongoing medical issues.

Determination and Compensation

AFCA found the financial firm breached its duty of care and failed to provide appropriate advice. The value of the lost insurance was calculated by an actuary at $300,878, with an additional $3,000 for non-financial loss and $5,000 for legal costs. Interest will also be paid on the direct financial loss.

Outcome

The financial firm must pay the complainant $308,878 plus interest within 21 days of acceptance. This decision highlights the importance of advisers maintaining accurate client records and providing timely advice to protect clients’ interests.

If you have concerns with services provided by your financial advisor which led to insurance coverage being cancelled (or not being available to claim upon), we ask that you contact Financial Dispute Legal to discuss your circumstances and consider any rights to recover compensation on 1300 433 533 or enquiry@fdlegal.com.au

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