Following concerns raised by ASIC about unfair telephone sales of life insurance, The Colonial Mutual Life Assurance Society Limited (trading as CommInsure) has conducted a remediation program.
The refunds are to policyholders who were Commonwealth Bank customers between 2010 and 2014 and were sold a range of life insurance products via telemarketing calls by Aegon Insights Australia Pty Limited (formerly known as Aegon Direct Marketing Services Australia Pty Ltd) (Aegon).
“ASIC is concerned that the way in which these products were sold was manifestly unfair, with customers given insufficient information to make an informed decision,” ASIC Deputy Chair Daniel Crennan QC said.
CommInsure has completed a majority of the remediation payments and expects to finalise the remediation program by the end of 2019, with refunds to around 30,000 customers expected to exceed $12 million. During ASIC’s review of direct life insurance the regulator identified concerning sales practices by CommInsure and raised concerns about sales of its accidental death insurance product called ‘Accident Protection’, including that:
- almost half of all policies sold in 2012-13 were cancelled by the consumer during the cooling-off period or within six months, suggesting consumers may have felt pressured to buy the policy then realised they did not want it or could not afford it;
- inadequate or unclear descriptions of the product were given, which was particularly concerning due to the extremely limited cover provided by the policy;
- sales were completed in as little as eight minutes, raising concerns about how the consumer could have made an informed decision about a complex insurance product; and
- sales representatives often selected the level of cover on behalf of the consumer, further reducing the likelihood that consumers were getting cover that met their needs.
After ASIC raised concerns about the sales of CommInsure’s Accident Protection product, CommInsure identified similar concerns with the telemarketing of a range of other life insurance products sold by Aegon between 2010 and 2014.