Insurance company ClearView will refund $1.5 million to customers after ASIC raised concerns over its sales practices, including that it made “misleading statements” about policies’ cover and premiums.
ASIC’s review of ClearView sales calls “found it used unfair and high pressure sales practices when selling consumers life insurance policies” over the phone.
The review also found that 1,166 of the 16,000 affected customers were “residing in high Indigenous populated areas who were unlikely to have English as their first language”.
ClearView sales staff were found to have “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”, ASIC said.
In response to ASIC’s findings, ClearView will refund all bank fees and interest to customers with high initial lapse rates, and refund 50 per cent of premiums and interest to customers with ongoing lapse rates.
Additionally, the insurer will offer eligible customers a sales call review and remediation where necessary, engage EY to provide independent assurance over the remediation program and cease selling life insurance directly to consumers who have not sought personal financial advice.
“Purchasing life insurance is a key financial decision for consumers, and all the information provided to them must be clear and balanced,” said ASIC deputy chair Peter Kell.
“Insurers should properly supervise their sales staff and ensure that no misconduct is occurring.”
ASIC said this outcome was the result of work undertaken by its Indigenous Outreach Program.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 22 Oct 2018ASIC reveals findings of CBA enforceable undertakingBy Adrian Flores
- 22 Oct 2018ARCO fund added to BT Panorama platformBy Adrian Flores
- 22 Oct 2018NAB well-placed to sell MLC wealth businessBy James Mitchell
- 22 Oct 2018CBA announces appointment of CFOBy Reporter
- 22 Oct 2018‘We’ve taken too long’ to fix advice problems: NABBy Adrian Flores
- 19 Oct 2018Life insurer fires 50, kills outbound sales businessBy James Mitchell
- view all