CBA to review CommInsure advertising practices following ASIC investigation
CommInsure, the Commonwealth Bank’s insurance arm, is to have its advertising material reviewed by an independent party as part of its settlement with the Australian Securities and Investment Commission (ASIC) over misleading insurance marketing.
The agreement follows investigations by Fairfax Media and the ABC that found consumers were being denied insurance claims based on outdated definitions of medical conditions, which saw CommInsure pay out $4 million in re-assed claims.
At this stage it is uncertain who will conduct the ‘independent reviews’ which are intended to ensure CommInsure’s advertising complies with Australian Consumer Law and then report back to ASIC by 30 June 2018.
It is also unclear whether the offending advertising, which was directed at both consumers and financial planners, was created by an agency or in-house. Mumbrella has approached CBA for comment.
“The details of the external compliance review are yet to be confirmed, and ASIC will continue to engage with CommInsure as the details are finalised,” an ASIC spokesperson told Mumbrella.
“ASIC will approve an external firm with appropriate experience in financial services law compliance reviews.”
“The ASIC Act provisions apply the Australian Consumer Law to financial products and services.”
ASIC reviewed CommInsure’s advertising from mid-2013 to March 2016 and found what it believed were misleading and deceptive statements made on some of CommInsure’s websites about customers’ entitlements if they suffered a heart attack.
In a media statement the Commonwealth Bank said: “CommInsure has acknowledged ASIC’s concerns foreshadowed in ASIC’s media release issued in March 2017 regarding a small number of CommInsure’s advertising materials.
“The advertisements, which were primarily produced for financial advisers, were published between mid-2013 and March 2016 for its life insurance policies.
“In March 2016, CommInsure updated its Heart Attack definition back to May 2014 and made further changes by backdating that definition to October 2012 in March this year.
“As a result, CommInsure has paid 32 customers around $4 million after reviews of claims against the updated definitions.
“Throughout the same period CommInsure paid approximately $4.4 billion in life and income protection payments to around 86,000 customers.
“CommInsure will commission a compliance review of its advertising sign-off processes and procedures.
“CommInsure will also donate $300,000 to the Insurance Law Service as a Community Benefit Payment.”
