ASIC has announced that ClearView Life Assurance Limited (Clearview) will refund 16,000 customers a total of approximately $1.5 million. This follows an ASIC review of Clearview’s life insurance sales practices.
The review focused on sales to consumers residing in high Indigenous populated areas who were unlikely to have English as their first language. The sales were made directly to consumers, without personal financial advice. The review found that sales staff:
- made misleading statements about the cover, the premiums and the effect of the customer’s pre-existing medical conditions;
- did not clearly obtain the customer’s consent to purchase the cover before processing premium payments; and
- used unfair and high pressure sales practices.
In response to ASIC’s concerns, Clearview will:
- refund full premiums, all bank fees and interest to customers with high initial lapse rates and refund 50% of premiums and interest to customers with high ongoing lapse rates;
- offer a sales call review to other eligible customers and remediate if there is evidence of poor conduct;
- engage EY (as an independent expert) to provide independent assurance over the remediation program; and
- cease selling life insurance directly to consumers (i.e. without personal financial advice).
This announcement follows a continued focus by ASIC into the life insurance industry. ASIC has noted that it is conducting an industry review of direct life insurance to identify any concerns with sales practices or product design that may be driving poor consumer outcomes. ASIC will publish the findings of their review in mid-2018.