On 12 July 2021, ASIC announced that OnePath Life Pty Ltd (OnePath) will be remediating up to $35 million to over 40,000 customers who were sold life insurance policies over the phone between 2010 and 2016. This remediation flows from ASIC intervention, enforcement and regulatory action over the past 3 years, largely in response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Banking Royal Commission).
ASIC took action to stem and remediate harms caused by OnePath’s unethical telephone sales practices, which included:
- pressure selling tactics, such as deferring the first premium payment, and using the cooling off period as an inducement for customers to purchase the product,
- failing to provide sufficient information about key policy exclusions, and
- leading customers to believe that the salesperson was calling from ANZ Bank (at the time of the sales calls, OnePath was owned by ANZ Bank, but was operating as a separate business).
To address ASIC’s concerns regarding these sales practices, OnePath is
- refunding premiums, with interest, to customers who purchased a life insurance policy which either lapsed, or was cancelled, within 2 years of the sale,
- reviewing past claims and complaints, and
- waiving certain conditions for affected customers who still hold an active policy.
OnePath’s remediation program commenced in July 2019 and is expected to conclude in December 2021.
OnePath’s remediation program follows ASIC’s Report 587, The Sale of Direct Life Insurance, which was released on 30 August 2018. This deep dive review into the direct sales of life insurance found poor sales conduct, resulting in customers purchasing products which were not suitable for their particular financial circumstances or products which failed to perform as expected, often without independent financial product advice.
Over the following 3 years, ASIC has delivered deterrence for financial service providers, through concerted regulatory action, enforcement, court action and disruption. This has resulted in improvements in industry practices and sales practices and delivered compensation to thousands of customers who have suffered harm, largely by paying for products they did not want or need. ASIC’s deep dive review also formed the evidence base for several misconduct case studies conducted by the Banking Royal Commission.
You can read more about the Banking Royal Commission on our Pinpoint platform here.
Sources: ASIC, 21-169MR, [media release], 12 July 2021, accessed 12 July 2021.
ASIC, REP 587, The Sale of Direct Life Insurance, [report], 30 August 2018, accessed 12 July 2021.
Banking Royal Commission Final Report, 1 February 2019, accessed 12 July 2021.
CCH Pinpoint ®, Banking Royal Commission, 27 October 2020, accessed 12 July 2021