ClearView’s direct life sales business takes regulatory hit
Publicly-listed life insurance and advice company, ClearView Life Assurance Limited (Clearview) will refund approximately $1.5 million to 16,000 consumers and has stopped selling life insurance direct to consumers.
The Australian Securities and Investments Commission (ASIC) said the refund and action by ClearView had followed regulator concerns about its life insurance sales practices.
ASIC said a review of ClearView's sales calls found it used unfair and high pressure sales practices when selling consumers life insurance policies by phone and that these sales were made directly to consumers, without personal financial advice.
It said ASIC's review raised concerns that between 1 January 2014 and 30 June 2017, when selling over 32,000 life insurance policies direct to consumers, 1,166 of which were to consumers residing in high Indigenous populated areas who were unlikely to have English as their first language, ClearView sales staff:
- made misleading statements about the cover, the premiums, and the effect of any of the consumer's pre-existing medical conditions
- did not clearly obtain consumer consent to purchase the cover before processing the premium payments, and
- used pressure sales tactics to sell the policies.
In response to ASIC's concerns, ClearView will:
- refund full premiums, all bank fees and interest to customers with high initial lapse rates
- refund 50 per cent of premiums and interest to customers with high ongoing lapse rates
- offer a sales call review to other eligible consumers and remediate if there is evidence of poor conduct
- engage an independent expert (EY) to provide independent assurance over the consumer remediation program; and
- cease selling life insurance directly to consumers (that is, without personal financial advice).
ASIC Deputy Chair Peter Kell said that pressure sales tactics are unacceptable.
“Purchasing life insurance is a key financial decision for consumers, and all the information provided to them must be clear and balanced. Insurers should properly supervise their sales staff and ensure that no misconduct is occurring,” he said.
Recommended for you
The FAAA has written to over 2,000 affected members to warn them of the upcoming education deadline with the organisation warning the numbers yet to meet the requirements are “very, very high” with just six weeks to go.
HUB24 has taken an equity stake in Finura Group’s digital arm to accelerate the development of its SaaS platform, triggering the separation of Finura’s advisory business.
Coastal Advice Group has announced a rebrand to mark the next phase of the firm as it pushes to hit a target of 15 acquisitions in FY25-26, expanding its national reach across Australia.
Despite the advent of new advice technologies which promise to streamline the adviser-client relationship, research by Praemium and CoreData has found the trust and human relationship is most valued by clients.
