The Australian Securities and Investments Commission (ASIC) has announced a ban on unsolicited 'cold call' telephone sales of direct life insurance and consumer credit insurance (CCI). The ban will address poor sales practices that have led to unfair consumer outcomes. It will take effect from 13 January 2020.
The ban is consistent with recommendations made by the Financial Services Royal Commission and provides protections to consumers that complement broader legislative reform by the Government.
ASIC director Sean Hughes said in a statement, "ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system. This action draws a clear line in the sand. From January, firms will no longer be able to call consumers out of the blue and use sophisticated sales tactics to pressure people into buying life insurance and CCI products.’
The ban complements enforcement action ASIC has undertaken for past poor sales conduct by insurers. Last week, CommInsure was fined A$700,000 ($478,000) after pleading guilty to unlawful unsolicited telephone sales of life insurance. ASIC has also commenced civil penalty proceedings against Select AFSL relating to telephone sales of life and accidental injury insurance.
In July 2019, ASIC consulted on the ban and sought feedback in a consultation paper. Of the 15 non-confidential responses ASIC received, no respondents opposed the ban.
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