ASIC Secures up to $35 million in REMEDIATION FOR ONEPATH LIFE CUSTOMERS

OnePath Life will remediate up to $35 million to more than 40,000 life insurance customers who were sold products over the phone between 2010 and 2016, the corporate regulator announced today.

The Australian Securities and Investments Commission (ASIC) says the remediation program follows the regulator’s report into life insurance sales, which found poor conduct led to consumers buying products they did not need, could not afford or which did not perform as expected.

ASIC says in OnePath’s case, the insurer engaged in “egregious” practices including pressure selling tactics and failing to provide information about key policy exclusions to sell to affected customers.

Consumers who bought from OnePath during the offending period were also led to believe the salesperson over the phone was calling from ANZ Bank with a special offer.

ASIC says at the time of the sales calls, OnePath was owned by the bank - which finalised the sale of the business in 2019 to Zurich for $2.85 billion.

“For over 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 Deputy Chairman Karen Chester said.

“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.

“Better industry practice and improved consumer outcomes followed ASIC’s 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.”

She says the 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.

ASIC says OnePath has taken action to address the regulator’s concerns by refunding premiums, with interest, to customers who purchased a life insurance policy which lapsed or was cancelled within two years of the sale.

The insurer is also reviewing past claims and complaints as well as waiving certain conditions for affected customers who are still holding an active policy.

The remediation program started in July 2019 and is expected to finish in December.