In Australia, ASIC says OnePath Life is remediating up to $35 million to more than 40,000 customers who were sold life insurance policies over the phone between 2010 and 2016, through sales practices associated with direct – non advised – life insurance products.
A statement from the commission says this remediation flows from ASIC intervention and action over the past three years and that ASIC took action to stem and remediate harms caused by OnePath’s poor telephone sales practices.
It says that extensive consumer harm resulted from egregious sales practices including:
- 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
- Leading the consumer to believe the salesperson was calling from ANZ Bank with a special customer offer
ASIC says that at the time of the sales calls, OnePath was owned by ANZ bank, albeit operating as a separate business.
ASIC Deputy Chair Karen Chester says that for more than three years now, ASIC has “pursued enforcement, regulatory and remediation action to tackle misconduct and stem consumer harm in the direct life insurance market”.
“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.”
She says that better industry practice and improved consumer outcomes followed its “deep dive review of direct sales of life insurance in 2018 and three years of concerted regulatory action”.
“Notably, the deep dive review also informed the evidence base for several Hayne Royal Commission misconduct case studies. Our review uncovered egregious sales practices, with tens of thousands of consumers paying for products they did not want, did not need, or were not suitable for them.”
…less than one in two consumers (only 41 percent) have banked their cheque or arranged with OnePath for their refund to be paid into their bank account…
Chester says it’s 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.
She urges OnePath or ANZ insurance customers who have been contacted by OnePath about a refund to respond to OnePath to arrange payment.
The statement adds that this remediation program by OnePath follows 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.
It adds that to address ASIC’s concerns about these sales practices, OnePath is:
- Refunding premiums, with interest, to customers who purchased a life insurance policy which lapsed or was cancelled within two years of the sale
- Reviewing past claims and complaints
- Waiving certain conditions for affected customers who still hold an active policy
The remediation program started in July 2019 and is expected to finish in December 2021.
OnePath is writing to impacted customers who purchased a life insurance policy between 2010 and 2016 with information about the premium refund arrangements.