OnePath Life to remediate $35m to customers

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. 

Related News:

“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.




Recommended for you

Author

Comments

Comments

Of course ASIC & Frydenberg will take no responsibility that their intervention and corruptly skewed Adviser Life Insurance reports were all designed to Kill Life Advisers on the basis of the totally unfounded Churn problem, that ASIC now admits never existed in any significant way.
Yet ASIC & Frydenberg forced LIF reduced Commissions and FARSEA onto Advisers to help kill Real Advisers and allow the Banks & Life companies to flog dodgy direct Life Insurances.
Had Hayne not been so scathing of Direct Life Insurance, ASIC & Freedenberg's plan would have worked.
Now it's a total train wreck:
- Dodgy Direct Life Insurance is almost dead, as it should be.
- Real Adviser's, especially Life Insurance Adviser's leaving the industry in droves.
- Other Real Adviser's can't make Life Insurance Advice worth their time anymore, so most are not doing it.
- Life Insurance Companies new business collapsing and existing premiums go up 100% in 3 years, so loads of policy holders reduce or cease cover.
- Life Insurance companies with massive losses.
- Millions of Australians with less or no Life Insurance and NO Advice.
Great job Frydenberg & ASIC, you need to be held accountable for your actions.

Haha! Love the name ben Dover :-) re your comments - YES - every word you wrote is true and I concur. Both Fryden and ASIC have much for which to answer. reprehensible both! FAR, far too late though, sadly, for many advisers who are leaving after 2, 3 or 4 decades loyally and honestly protecting their clients. Tossed aside in the FARCE-IA malaise like yesterday's news. Experience being lost from our industry like it was just swill water - this will see the end of our risk industry as we know it. I have no doubt about this after being a part of it for 33 years. It will cease to be a relationship industry and become a simple transaction industry - mainly by around 2025 I'd say if it lasts that long. Products will become stripped down and simple and offer next to no real protection (TPD, IP, TRA) as the insurance companies won't be able to fund the current complex but generous products. The poor clients won't realise what's being done to them until they try to claim - without their loyal advisers this time - and the horrible 'declined' answer comes back. Word will spread, people will stop buying without proper experienced advisers to show them why and what they need. Frydenberg and ASIC rabbit on about client best interest, well . . . they wouldn't know the meaning of it, if they did then this situation would not be happening. They would bend over backwards (no pun Ben :-)) to keep advisers from leaving our once great industry.

Add new comment