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The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against industry superannuation fund Cbus, alleging that the latter has been dragging its feet in processing over 10,000 death and disability claims.

ASIC claimed in the lawsuit that from the total, more than 6,000 claims were delayed by over a year, representing half of Cbus' total claims at the time. Beneficiaries and policyholders were the worst affected by the backlog, ABC reported.

Outlining the total financial loss incurred by members, which equates to over AU$20 million, ASIC said it has appealed to the Federal Court to impose appropriate penalties and compliance orders for those in question.

The civil penalty proceedings statement alleged that Cbus failed to act efficiently, honestly, and fairly in the handling of claims for death benefits and TPD insurance between September 2022 and November 2024.

ASIC claimed that despite warning indications from its third-party administrator, Australian Administration Services Pty Limited, United Super, the trustee of Cbus, failed to fully assess the magnitude of the harm to members and claimants, thereby neglecting its duties.

"Delays in claims processing like those alleged by ASIC cause real harm to families who may be relying on the payments to meet critical expenses. This adds to difficult personal circumstances, whether grieving for a loved one or dealing with severe injury or illness. The additional anxiety and pain these delays caused compounded the issues these members and their families faced," said Sarah Court, ASIC Deputy Chair, told Investor Daily.

"By late 2022, more than 6,000 Cbus members and claimants had their payments delayed by more than 12 months. Extraordinarily, that equates to more than 50% of Cbus' total claims at that time. We allege they are yet to completely rectify these issues," Court noted.