Our report on an insurer breaching the Life Insurance Code of Practice drew strong reader interest this week…
A life insurer has breached the Life Insurance Code of Practice by failing to apply a premium discount in the way it was advertised, resulting in more than 4,000 customers being overcharged, the Life Code Compliance Committee has found.
In its latest Notice of Determination the committee says it found the insurer did not apply a premium discount in the way it was advertised in that it applied the discount at 2% rather than the advertised 2.5%, resulting in 4,039 customers being overcharged.
The committee noted the insurer became aware of the error, caused by a systems issue, during a review nearly one year after it launched the discount offer. It added the insurer self-reported the breach, which has since been rectified.
As remediation, the life insurer will:
- Refund the affected customers with interest
- Send the affected customers an apology letter with an explanation of the error
The committee says this case highlights the “…critical need for insurers to test and review the implementation of new pricing features to ensure that they apply advertised benefits correctly and that they identify and fix any issues early.”
It adds that it will continue to monitor these Code obligations “…and reserve the right to impose sanctions for serious and persistent non-compliance.”
Click here to read the full determination.
Yet another example of why the LCCC is a bit of a paper tiger.
It does not name the life insurer involved.
On ABC and commercial TV news this morning, there is a report that ASIC are pursuing QBE ,the large Australian general insurer, because it didn't apply a discount that it was a offering to renewing policyholders. A big fine is in store.
Come on LCCC, what about a bit of truth telling.The only result of your little omission is that it will drag in the ASIC-funded consumer groups and give them another opportunity to bag the life insurance industry as a whole
NAME NAMES !
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