ASIC bans cold call sales of direct life insurance

The ban will address poor sales practices that have led to unfair consumer outcomes, and will take effect from 13 January 2020, ASIC said in a statement.

ASIC said it has updated its guidance in Regulatory Guide 38 relating to hawking provisions to reflect the ban.

ASIC said the ban is consistent with recommendations made by the Hayne royal commission and provides protections to consumers that complement broader legislative reform by the government.

Further, ASIC noted the ban complements enforcement action it has undertaken for past poor sales conduct by insurers.

“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,” said ASIC commissioner Sean Hughes.

“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.”

Last week, CommInsure was fined $700,000 after pleading guilty to unlawful unsolicited telephone sales of life insurance.

The corporate regulator has also commenced civil penalty proceedings against Select AFSL relating to telephone sales of life and accidental injury insurance.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].