Following concerns raised by ob体育 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).
During ob体育鈥檚 review of direct life insurance (REP 587 The sale of direct life insurance) ob体育 identified concerning sales practices by CommInsure. Concerns were raised by ob体育 with CommInsure about sales of its accidental death insurance product called 鈥楢ccident Protection鈥�, including that:
- almost half of all policies sold in 2012-13 were聽cancelled by the consumer during the cooling-off period or within six聽months, suggesting consumers may have felt pressured to buy the policy 聽聽聽聽 then realised they did not want it or could not afford it;
- inadequate or unclear descriptions of the聽product were given, which was particularly concerning due to the extremely聽limited cover provided by the policy;
- sales were completed in as little as eight聽minutes, raising concerns about how the consumer could have made an聽informed decision about a complex insurance product; and
- sales representatives often selected the level of聽cover on behalf of the consumer, further reducing the likelihood that聽consumers were getting cover that met their needs.
After ob体育 raised concerns about the sales of CommInsure鈥檚 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.
鈥榦b体育 is concerned that the way in which these products were sold was manifestly unfair, with customers given insufficient information to make an informed decision,鈥� ob体育 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.
Background
The sales calls of concern to ob体育 were conducted by Aegon on behalf of CommInsure. The contact details for customers were supplied by Commonwealth Bank of Australia, of which CommInsure is a wholly-owned subsidiary.
The remediation program addresses sales conduct issues identified following ob体育鈥檚 initial concerns about sales of the Accident Protection policy. The remediation program will apply to outbound telemarketing sales of Accident Protection, Injury Cash Protection, Term Life Protection, Home Loan Protection and Simple Life products sold since 1 January 2010:
- CommInsure will provide full refunds of premiums paid (plus interest) to consumers whose policies lapsed within 6 months,聽and partial refunds of a majority of premiums paid (plus interest) to 聽聽聽聽 consumers whose policies lapsed between 6 and 12 months.
- Given that the description of certain exclusions applied to these products at the point of sale was inadequate and unlikely to provide the consumer with sufficient information to make an informed聽decision, CommInsure will waive a range of exclusions for both future and聽retrospective claims. This will include re-assessing past claims that were聽declined on the basis of certain exclusions.
- For CommInsure鈥檚 Injury Cash Protection聽product, the definition of Permanent and Total Disablement was聽significantly broadened in 2017 鈥� CommInsure will retrospectively assess聽declined claims against the broadened definition.
- Some technical errors applying to CommInsure鈥檚聽Accident Protection product will be addressed, including the mis-application of a 鈥榩ublic holiday benefit鈥� when assessing claims, and the failure to implement 鈥榩artner discounts鈥� which were offered to some customers during sales calls. Affected consumers will be paid the聽additional claim benefit, or refunded the discount that was not applied,聽plus interest.
CommInsure stopped offering Term Life Protection and Home Loan Protection in July 2012, Injury Cash Protection and Accident Protection in late 2013, and ceased all outbound telemarketing sales of life insurance in December 2014.
CommInsure has today pleaded guilty to 87 counts of offering to sell insurance products in the course of non-compliant unsolicited telephone calls (19-313MR).