ASIC secures over $100m in remediation for Freedom Insurance customers

ASIC freedom life insurance

18 August 2022
| By Staff |
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The Australian Securities and Investments Commission (ASIC) has secured $102 million for customers who could have been mis-sold policies by Freedom Insurance.

The remediation payments have been secured for around 83,600 customers who were, or may have been, mis-sold insurance policies over the phone by Freedom Insurance between 2010 and 2018.

ASIC is asking for those who were customers of the group during this period to come forward to see if they are eligible for a refund.

Karen Chester, ASIC deputy chair, said: “Freedom Insurance used harmful sales practices to sell funeral, accidental death and life insurance policies to vulnerable customers. They also used unfair retention practices to keep customers in the policies when they tried to cancel.”

ASIC identified the harmful sales and retention practices of Freedom Insurance in its 2018 review of the sale of direct life insurance. The conduct was later highlighted as a case study during the Financial Services Royal Commission.

In response, ASIC:

  • announced the implementation of a ban on the unsolicited ‘cold call’ telephone sales of direct life insurance and consumer credit insurance in 2019 (19-335MR);
  • commenced civil penalty proceedings in the Federal Court in 2021 against both the former managing director and former quality assurance manager of Freedom Insurance in relation to the sales incentive programs offered by Freedom Insurance (21-279MR);
  • has secured a significant remediation program for customers. Currently, over $102 million has been paid, or assessed as due to be paid, to around 83,600 customers adversely affected by the conduct of Freedom Insurance.

Chester added: “We believe there are thousands of customers that likely remain entitled to a refund but they haven’t come forward to claim it. We encourage Freedom Insurance customers from between 2010 to 2018 who believe they were mis-sold a policy, or who tried to cancel their policy without success, to contact their insurers and be assessed for remediation. We have published information on ASIC’s website about the steps customers can take to seek a refund, including the contact details for each insurer.”

AIA Australia, NobleOak Life, Swiss Re Life & Health Australia and ClearView Life Assurance issued the policies distributed by Freedom Insurance.

AIA Australia, NobleOak Life, Swiss Re Life & Health Australia commenced the Freedom Insurance Remediation Program in February 2020 for customers sold policies between October 2010 and October 2018. ClearView started a separate remediation program in June 2022.

ASIC noted that Freedom Insurance no longer sells insurance products, but individuals can still contact the insurer who issued their policy to check if they are eligible for remediation.

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