Delays in insurance payouts left thousands of Australians in distress. Here’s what happened — and why it matters.

Lead-In Summary

Cbus, one of Australia’s largest superannuation funds, has admitted to breaching corporate law after thousands of members were affected by major delays in insurance claim processing. The fund now faces a proposed $23.5 million penalty and $32 million in compensation payouts. For injured workers and their families, this case is a stark reminder of the real-world impact of corporate misconduct.

1. Background of the Case

In a landmark case that has sent shockwaves through the superannuation sector, the Australian Securities and Investments Commission (ASIC) launched legal action against industry super fund Cbus over its “systemic” mishandling of total and permanent disability (TPD) and death benefit insurance claims.
Cbus, which manages more than $100 billion in member funds and is chaired by former Federal Treasurer Wayne Swan, has now formally admitted to multiple breaches of corporate law. In a joint submission to the Federal Court with ASIC, Cbus has agreed to a proposed penalty of $23.5 million, while also estimating that over $32 million in compensation will be paid to more than 7400 affected members and beneficiaries.

2. The Legal Issues and Process

The case focused on Cbus’s failure to handle insurance claims in a timely and lawful manner. ASIC alleged that these failures breached key obligations under the Corporations Act, particularly the duty to provide financial services “efficiently, honestly and fairly”.

Notably, the court filings revealed:

  • Significant delays in insurance payouts, including death benefits and TPD claims.
  • Members and their families facing financial hardship, being forced to draw on savings or borrow money while awaiting funds.
  • Emotional distress at critical times, including after the death or serious injury of a loved one.
  • Cbus’s failure to promptly report these breaches to ASIC, as required under its financial services licence.

This case forms part of a broader crackdown by ASIC aimed at improving the super industry’s standards around claims handling, transparency, and accountability.

3. Outcome and What Happens Next

The Federal Court has yet to approve the proposed fine, but if accepted, this will bring an end to one of the most significant cases of its kind in recent years.

In addition to the $23.5 million fine:

  • Cbus will pay $32 million in compensation to affected individuals.
  • Cbus will also cover ASIC’s legal costs of $500,000.
  • The Court is expected to declare that Cbus breached its obligations under financial services law.

Cbus acknowledged its failures in a public statement, saying:

“We sincerely apologise to members, families and loved ones who were impacted by the delays during a challenging and distressing time. We have taken steps to avoid protracted litigation which would not be in members’ best financial interest.”

The fund also stated it had cooperated with ASIC and had since overhauled its internal claims-handling processes. However, questions remain around the role of outsourcing, as Cbus had initially blamed its administration provider (MUFG) for much of the delay. That separate dispute has also now been settled.

4. Why It Matters — Especially for Injured Workers and Their Families

This case highlights a critical truth: when claims are delayed, real lives are affected.

For injured workers and their loved ones:

  • Timely access to TPD benefits or death claims can mean the difference between stability and hardship.
  • Families facing grief or loss of income shouldn’t have to battle red tape or delays to access what’s legally theirs.
  • Accountability matters — especially from institutions managing billions on behalf of working Australians.

As a law firm that advocates for everyday people, PRD Legal stands firmly for transparency, justice, and human dignity. We see the impacts of delayed payments and bureaucratic obstacles every day — and we believe that no one should be left waiting in their time of need.

Legal Insight

This case is a timely reminder that super funds must comply with their obligations under financial law. As ASIC continues to raise the bar, injured individuals and beneficiaries should feel empowered to question delays, seek legal advice, and demand fair treatment.

If This Affects You

If you’re facing delays in accessing superannuation-based insurance benefits — whether it’s for a TPD claim, income protection, or death benefit — you may still have legal options.

If your claim has been rejected or delayed, PRD Legal may be able to help.

We’ll explain your rights clearly, investigate your options, and support you every step of the way.