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FSC backs ban of life insurance hawking

The Financial Services Council has backed the prohibition of pressure selling of insurance products, over the phone or otherwise, in response to a Hayne royal commission recommendation.

In a submission, FSC chief executive Sally Loane said insurers should not be able to make outbound calls with the view to sell life insurance or consumer credit insurance when people were not aware the call was coming – in other words, being called cold.

“There is no place for cold calling and pressuring random people into buying a life insurance product they don’t need, want or understand,” Ms Loane said.

“For an outbound call to be justified, a person must first have given their positive, clear and informed consent, before being contacted.

Additionally, Ms Loane said that, given there is no legislated time frame in which calls need to be made, the FSC believes an initial call should be made within three months of consent.

“It is important to note that the industry has already made significant improvements through better use of monitoring and oversight, through remuneration practices, appropriate incentives, culture, training and the FSC Life Insurance Code of Practice, she said.

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“These anti-hawking measures ensure the conduct on all calls is at the highest standards.

The FSC submission is in response to recommendation 4.1 of the financial services royal commission, that hawking of insurance products should be prohibited.

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