February 6, 2018
ClearView Life will refund $1.5 million to consumers who were sold policies over the phone after ASIC found it used unfair and high pressure sales practices when selling the products directly to consumers.
The refunds will go to 16,000 consumers and follows a review of ClearView’s sales calls which ASIC found also contained misleading statements in the way the company sold direct life insurance over the phone to consumers without personal financial advice.
ASIC found in its review of the sale of more than 32,000 life insurance policies direct to consumers between 1 January 2014 and 30 June 2017, that ClearView sales staff:
- Made misleading statements about the cover, the premiums, and the effect of any of the consumer’s pre-existing medical conditions
- Did not clearly obtain consumer consent to purchase the cover before processing the premium payments
- Used pressure sales tactics to sell the policies
The regulator stated in response to its concerns that ClearView will:
- Refund full premiums, all bank fees and interest to customers with high initial lapse rates
- Refund 50 per cent of premiums and interest to customers with high ongoing lapse rates
- Offer a sales call review to other eligible consumers and remediate if there is evidence of poor conduct
- Engage an independent expert to provide independent assurance over the consumer remediation program
- Cease selling life insurance directly to consumers
ASIC Deputy Chair, Peter Kell labelled the pressure sales tactics as ‘unacceptable’ and said “Purchasing life insurance is a key financial decision for consumers, and all the information provided to them must be clear and balanced. Insurers should properly supervise their sales staff and ensure that no misconduct is occurring”.