November 19, 2019
CommInsure has pleaded guilty this week to 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls.
This announcement was made by ASIC, in which the regulator detailed that between October and December 2014, CommInsure, through its agent, telemarketing firm Aegon Insights Australia Pty Ltd, unlawfully sold life insurance policies known as Simple Life over the phone (see: CommInsure Charged With Hawking Offences).
It added that, in all of the 87 calls charged, CommInsure did not comply with the requirement to offer the customer the option of having the information required to be included in the Simple Life PDS read to them prior to the offer to issue or sell the product.
ASIC noted this matter is being prosecuted by the Commonwealth Director of Public Prosecutions after an investigation and referral of a prosecution brief by ASIC and that the insurer will be sentenced at a later time.
CommInsure to Refund $12 million
In related news, ASIC released another statement at the same time as its release on CommInsure’s guilty plea on the hawking offences. The second statement announced that CommInsure is in the process of refunding in excess of $12 million to around 30,000 customers following concerns raised by the regulator about unfair telephone sales of life insurance.
It notes CommInsure’s remediation program is making refunds 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).
The regulator stated it identified concerning sales practices by CommInsure and that those concerns were raised by ASIC with CommInsure about sales of its accidental death insurance product, ‘Accident Protection’.
Its concerns included 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
- 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 these concerns, it said CommInsure identified similar concerns with the telemarketing of a range of other life insurance products sold by Aegon between 2010 and 2014.
The regulator notes CommInsure has completed a majority of the remediation payments and expects to finalise the remediation program by the end of 2019.