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ARTICLE · 09 MAY 2010

How Much Discretion Does A Trustee Have In Choosing A New Insurer?

DLA Piper Australia
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The recent decision of Manglicmot v Commonwealth Bank Officers Superannuation Corporation [2010] NSWSC 363 has provided some clarification on the issue of discretion of choosing a new insurer.

AustraliaInsurance
Chris Busuttil
Chris Busuttil
David Leggatt
David Leggatt

Superannuation fund trustees have a duty to exercise their discretion in good faith, without ulterior motive, acting on a real and genuine consideration. So much is readily accepted law. However, what happens when the discretion in question is not whether to award a benefit to a disabled worker, but a decision to change the fund's TPD insurer? Are there any consequences for providing reasons for such a decision and does the Superannuation Industry (Supervision) Act 1993 have anything to add to the existing law on trustees' obligations? The recent decision of Manglicmot v Commonwealth Bank Officers Superannuation Corporation [2010] NSWSC 363 has provided some clarification on these issues.

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