CommInsure has pleaded guilty to 87 counts of unlawfully selling life insurance policies in unsolicited phonecalls, marking the first criminal conviction against a major bank since the financial services royal commission.
The Commonwealth Bank-owned insurer, which will refund more than $12 million to about 30,000 customers, pleaded guilty on Tuesday to hawking charges brought by the financial regulator and related to sales made between 2010 and 2014.
The Australian Securities and Investments Commission's case focused on calls by telemarketing firm Aegon Insights Australia, which had been hired by CommInsure and was using customer contact details supplied by CBA.
The Commonwealth Bank-owned insurer will have to refund more than $12 million to about 30,000 customers. Source: AP
"ASIC is concerned that the way in which these products were sold was manifestly unfair, with customers given insufficient information to make an informed decision," ASIC deputy chair Daniel Crennan QC said.
CommInsure, which stopped telemarketing sales calls in December 2014, has already refunded most customers and expects to pay back the rest by the end of this year.
ASIC initially flagged a number of issues with CommInsure over the sale of its accidental death insurance, including the fact that almost half the policies sold in 2012/13 were cancelled within six months and that the speed of sales indicated customers could not have made an informed purchase.
CommInsure then identified similar concerns with the selling of more life insurance products.
CommInsure's fine, which will be a maximum $1.85 million, will be set on November 28.
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