AAP Finance

ASIC bans cold call life insurance sales

By AAP Newswire

The financial regulator has banned cold call selling of life and consumer credit insurance, drawing "a line in the sand" after CommInsure and others sold policies to those who didn't want, need or understand them.

The ban, which will take effect from January 13, was announced by the Australian Securities and Investments Commission on Wednesday, less than a week after Commonwealth Bank-owned CommInsure was fined $700,000 for 87 breaches of anti-hawking legislation.

It was the first criminal conviction against a major bank since the financial services royal commission.

ASIC commissioner Sean Hughes said firms had been using sophisticated tactics to pressure people into buying policies.

"ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system," Mr Hughes said.

"This action draws a clear line in the sand."

CommInsure refunded more than $12 million to about 30,000 customers over the unlawful sales made between 2010 and 2014, while Commonwealth Bank in 2017 refunded more than $10 million for mis-sold credit card and home loan protection insurance.

ClearView last year refunded over $1.5 million to 16,000 customers after pressuring them to buy life insurance over the phone, and Latitude Insurance in 2017 refunded about $1.1 million to 905 customers after it mis-sold consumer credit insurance and incorrectly denied claims.

ASIC has also launched proceedings against Select AFSL for allegedly harassing, coercing and misleading 14 consumers during telephone sales of life and accidental injury insurance.