The Australian Securities and Investments Commission (ASIC) is on the lookout for mis-selling of consumer credit insurance (CCI), after a study raised concerns about customer experiences when lodging claims.

The study, called Rep 361, was commissioned by ASIC, and finds claiming on a CCI policy can be stressful and costly for people already experiencing difficulties such as job loss or illness.

It notes “significant room for improvement”.

Even some consumers whose claims were accepted reported problems, with payments being less than expected or too slow to meet credit card repayment dates.

Rep 361 was commissioned after a 2011 report, Rep 256, raised concerns about how CCI was sold and the number of rejected claims.

ASIC Deputy Chairman Peter Kell says Rep 256 made 10 recommendations to minimise the risk of mis-selling, which the industry committed to adopting. He says this should address some of the problems identified in Rep 361.

“We will continue to work closely with industry to improve consumer experiences and outcomes in relation to CCI, and we will also take enforcement action when necessary, especially where CCI has been mis-sold,” Mr Kell said.

Rep 361 finds consumers whose claims were rejected often believed they had not been made aware of important policy exclusions and conditions. They also thought that because they were offered the policy, they must be covered.

The study of more than 50 consumers finds most did not know how to make a claim and did not do so promptly. Some struggled to complete long forms and provide documented evidence such as medical certificates.

Financial Ombudsman Service figures show about 11.6% of claims made on CCI policies are rejected, compared with about 1-5% for most other general insurance products.