ASIC is calling on life insurance companies to step up their direct product, sales, and complaints handling practices.
In a letter to industry, ASIC Commissioner Alan Kirkland points to growing concerns about increases in rates of disputes involving direct life insurance sales.
He lists four key recommendations to improve compliance and benefit consumers:
- Strengthen product design
- Improve sales and pay practices
- Apply consistent quality standards to retention calls and streamline cancellation processes
- Treat complaints as valuable business intelligence
“While life insurance can provide valuable benefits to consumers, it is typically a complex and costly product, so it is important that sales practices are designed with customers’ needs in mind,” said Kirkland.
“This is particularly important for life companies that are considering expanding direct sales of life insurance.”
In acknowledging some companies have made improvements, he states there are still notable deficiencies.
“Continued prominence of sales volume and targets can incentivise high pressure or misleading sales tactics contrary to the interests of consumers,” he said.
Click here to read the full letter.
