The Australian Securities and Investments Commission (ASIC) has announced that OnePath Life Pty Ltd is remediating up to $35 million to over 40,000 customers who were sold life insurance policies over the phone between 2010 and 2016 as a result of the ASIC’s intervention over the last three years.
The corporate regulator said that extensive consumer harm resulted from egregious sales practices such as:
- Pressure selling tactics (such as promoting a deferral of the first premium payment, and using the cooling off period as an inducement to buy the product);
- Failing to provide information about key policy exclusions; and
- Leading the consumer to believe that the salesperson was calling from ANZ Bank with a special customer offer.
ASIC deputy chair, Karen Chester, said ‘For over three years now, ASIC has pursued enforcement, regulatory and remediation action to tackle misconduct and stem consumer harm in the direct life insurance market.
“ASIC has delivered deterrence through court action, disruption and improvement in sales practices and delivered compensation to tens of thousands of consumers who have suffered harm,” Chester said.
“Better industry practice and improved consumer outcomes followed ASIC’s deep dive review of direct sales of life insurance in 2018 and three years of concerted regulatory action.”
At the time of the sales calls, OnePath was owned by ANZ bank, albeit operating as a separate business.
“It’s really disappointing that despite OnePath offering refunds to around 26,000 consumers, less than one in two consumers (only 41%) have banked their cheque or arranged with OnePath for their refund to be paid into their bank account,” ASIC said.
“If you are a OnePath or ANZ insurance customer who has been contacted by OnePath about a refund, please respond to OnePath to arrange payment of your refund.”
This remediation program by OnePath followed ASIC’s 2018 review of life insurance sold directly to consumers (that is, with no financial advice and outside of superannuation), which found high cancellation rates and poor claims outcomes in this sales channel.