The Colonial Mutual Life Assurance Society Limited, trading as CommInsure, a wholly owned subsidiary of the Commonwealth Bank of Australia (CBA), has been convicted of 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls, contrary to s992A(3) of the Corporations Act.
This conduct is known as ‘hawking’ and CommInsure was fined $700,000. In delivering the sentence, Her Honour Magistrate Atkinson of the Downing Centre Local Court in Sydney said there is a “significant need for deterrence”, and that those who market and sell insurance products “must ensure that they comply with what is important consumer protection legislation.”
“The conviction and sentence sends a significant message to the financial services industry. The model operated by CommInsure carried risks for consumers due to the unsolicited sale of complex insurance products which consumers may not have needed, wanted or understood”, said ASIC Deputy Chair Daniel Crennan QC.
This matter was prosecuted by The Office of the Commonwealth Director of Public Prosecutions after an investigation and referral of a brief of evidence by ASIC.
The conviction and fine followed CommInsure’s guilty plea to the charges on 19 November 2019 after being charged in October. The sentence takes into account CommInsure’s early guilty plea to the charges, which carried a maximum total penalty of $1,848,750. If the conduct had occurred under the new penalty regime, effective from March 2019, the maximum penalty would have been $10,962,000.