Facing questioning from the House economics committee on Friday, OnePath Custodians independent chair Victoria Weeks said the group had decided not to proceed with a remediation program for the policy, which saw around 146,000 fund members charged premiums under a default smoker classification.
Ms Weeks said OnePath had adopted the policy of charging smoker and non-smoker premium rates in 2014 and offered a discount to members who contacted the fund to inform them of their non-smoker status, in an effort to gain more data about the pool of insured customers.
“When we put together the package of rates back in 2014 and previously hadn’t had the differentiator, we had a reduction in premium for smokers of 8 per cent and we would offer a further discount if you confirm you’re a non-smoker,” she said.
“It assisted us in achieving competitive rates as part of the insurance package. We anticipated with that opportunity that members would contact us and say ‘I’m a non smoker’ – unfortunately the response rate wasn’t at high as we would have liked.”
Ms Weeks said OnePath ultimately abandoned the policy in 2017 due to low numbers of members contacting the fund to change rates, but was not convinced that members were ultimately worse off if premiums were priced at a blended rate.
“If we were to put people into the position they were at had we not had the slip rate, the premium would be higher because the market would have increased the cost of insurance generally,” she said.
Ms Weeks added that the group was still unsure whether many members in the insurance cohort were smokers or non-smokers, so remediating them to non-smoker status may cause issues for any future claims.
“The difficulty we have is we don’t know, so to the notion of remediation, do we treat a defaulted smoker as a non-smoker and then when they go to claim they don’t get the insurance because they’re treated differently?” she said.
“When people have contacted us to notify us for the discount or raise an issue we’ve remediated them, but if we don’t know there’s uncertainty as to the remediation account.”
IOOF was one of four groups not to offer a refund as a result of assigning default smoker premium rates to fund members, according to an ASIC report on the policy released in August.
The report found that OnePath, which IOOF recently acquired from ANZ, had the greatest number of affected members as a result of the policy.
Nothing like coming up with BS to explain away the theft of money from consumers. I guess the consumers best interest need not matter here. Or those 5 values of FASEA. Meanwhile IFA’s get thrown under the bus at every opportunity. CEO salaries and bonsues based on theft is okay…hey ASIC, APRA Ministers, AFA FPA …..what say you. That old line from Bob Dylan. Now all the criminals in their coats and their ties are free to drink martinis and watch the sun rise….
Perhaps they [i]can’t[/i][i][/i] pay…
If they are anything like the others insurers they probably cant pay, all those highly paid executives and they cant turn a profit, what is wrong with them, they just chase new business with discounts and jack up existing clients, great business plan.