CBA’s life insurance business will pay $300,000 towards a consumer advice service and have its advertising sign-off processes independently reviewed, following an investigation by the corporate watchdog.
The Australian Securities and Investments Commission (ASIC) raised concerns about certain instances of CommInsure’s life insurance ads, after commencing an investigation in April 2016.
This included a review of CommInsure’s advertising of two life insurance policies: Total Care Plan, sold through financial advisers; and Simple Life Insurance, sold directly to consumers.
The review looked at advertising from mid-2013 to March 2016 and found that misleading and deceptive statements are likely to have been made on some of CommInsure’s websites about the extent to which customers would be entitled to cover for trauma if they suffered a heart attack.
According to ASIC, the statements may have led a policyholder to believe they would be entitled to a lump sum payment if they suffered a heart attack in general, when in fact only certain types of heart attacks, which met certain medical criteria as defined in the policy, were covered.
In response to ASIC’s concerns, CommInsure will commission an external firm to conduct a compliance review of its advertising sign-off processes and procedures.
The review will look at whether CommInsure’s processes and procedures ensure compliance with the ASIC Act, and make recommendations to improve compliance if required.
CommInsure will report to ASIC by 30 June 2018 on the results of the review and the changes implemented.
As previously announced, CommInsure updated the definition of heart attack in its trauma life insurance products in March 2016 and is reassessing past claims under the updated definition back to October 2012.
To date, CommInsure has paid additional benefits for 32 claims, totalling approximately $4 million as a result of the reassessed claims.
