CommInsure has been sentenced following its conviction on 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls, contrary to s992A(3) of the Corporations Act, ASIC stated in a release.
As a result of this conduct, known as “hawking”, CommInsure was fined $700,000.
The conviction and fine follow CommInsure’s guilty plea to the charges on 19 November 2019 (see: CommInsure Pleads Guilty to Hawking Offences…).
ASIC stated that the sentence takes into account CommInsure’s early guilty plea to the charges, which carried a maximum total penalty of $1,848,750.
However, the maximum penalty would be $10,962,000 if the conduct were to occur under the new penalty regime, effective from March 2019.
In delivering the sentence, Her Honour Magistrate Atkinson 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.”
ASIC Deputy Chair Daniel Crennan QC said, “The conviction and sentence today 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,” he said.