ASIC has issued an interim stop order on ClearView Life’s ClearChoice Income Protection Cover and Accidental Income Protection Cover. The stop order relates to two underlying products.
A spokesperson for ClearView says the firm is working with ASIC to urgently resolve the stop order, which it says relates to general advice-related circumstances.
…products distributed where personal advice is given are not impacted
“This matter affects two income protection covers distributed through general advice only,” said the spokesperson. “ClearView products distributed where personal advice is given are not impacted.”
ASIC states it issued the stop order because of deficiencies in the target market determination (TMD). This follows ASIC’s recent interim stop orders related to pet insurance products under the Design and Distribution Obligations. ASIC is considering further stop orders for other insurance products.
The interim orders prohibit ClearView Life from engaging in retail product distribution and providing general advice in respect of the product for new customers. The orders are valid for 21 days unless revoked earlier.
ASIC notes it issued the interim stop order in relation to ClearView Life’s Income Protection Cover to protect consumers from acquiring life insurance that may not be consistent with their objectives, financial situation or needs.
The regulator says it was concerned that the TMD failed to consider the impact of key eligibility criteria (ie age and minimum employment criteria) on the suitability of the product for certain classes of consumers. As a result, ASIC was concerned that the target market contained classes of consumers for whom the product was not likely to be appropriate.
ASIC also noted its concern that the TMD does not specify any meaningful distribution conditions to ensure that the income protection cover would likely be distributed to consumers in the target market and likely exclude distribution to consumers in the negative target market.
ASIC expects ClearView Life to consider the concerns raised regarding the TMD and take immediate steps to ensure compliance. ASIC states it will consider making a final order if the concerns are not addressed in a timely manner.
ClearView Life will have an opportunity to make submissions before a decision is made about any final stop orders.
See our report: Stop Order Lifted by ASIC
