Home / Life Insurance / CommInsure charged over policy hawking breaches
7 October 2019
CommInsure has been charged with 87 criminal counts relating to the illegal hawking of life insurance policies and could face a combined maximum penalty of more than $1.8 million.
The action against the Commonwealth Bank of Australia (CBA) subsidiary relates to Simple Life policies sold through telemarketer Aegon Insights Australia. Each charge has a maximum penalty of $21,250.
The Australian Securities and Investments Commission (ASIC) says the calls to CBA customers between October and December 2014 were unsolicited and the company did not comply with all the relevant hawking exceptions in the Corporations Act.
“CBA and CommInsure are considering the matter and CBA does not intend to comment further at this time,” the company said in a statement to the Australian Securities Exchange.
The regulator says it will not be making further comment as the case is a criminal matter before the court, where it will be handled by the Commonwealth Director of Public Prosecutions.
The Consumer Action Law Centre says the ASIC action against CommInsure underscores the case for an economy-wide ban on product hawking.
“Our existing laws don’t go far enough – they don’t apply to all insurance products, and it's too easy to exploit loopholes,” CEO Gerard Brody said.
The Hayne royal commission recommended a broader banning of hawking and also called for ASIC to take a tougher approach more widely towards breaches within its mandate.
ASIC Commissioner John Price says ASIC’s ability to act had been strengthened by legislation in March that increased penalties and widened the range of matters that can be taken to court.
The Director of Public Prosecutions has also received $41.6 million to prosecute briefs from ASIC.
“We are focused on increasing and accelerating court-based enforcement outcomes and we are looking to use the full extent of our new powers and penalties,” Mr Price told the Australian Institute of Company Directors in Melbourne.
The CommInsure matter has been listed for first mention on November 19 at the Downing Centre Local Court in Sydney.