Superannuation trustees may not be fully covered under revised ASIC guidelines on professional indemnity (PI) insurance.
Last Friday, the corporate regulator reminded superannuation trustees they would need to comply with transitional requirements under ASIC Regulatory Guide 126.
The requirements come into effect from July 1. From that date, PI insurance will be compulsory for financial advisers and some trustees.
Under the Australian Prudential Regulation Authority's licence regime, particular trustees are required to hold PI insurance.
"As their existing cover was obtained under a different regime with different objectives, such licensees still need to consider whether their existing cover is adequate for the purposes of the Corporations Act," an ASIC statement said.
As a result trustees could face a potential shortfall in their trustee liability cover.
"The new requirements may require superannuation fund trustees to broaden the cover provided by their current trustee liability insurance policies," Mercer practice leader Russell Mason said.
While ASIC will provide guidelines about the level of cover required, the onus is on licence holders to comply with the new arrangements and ensure they have the right level of cover in place.
