The Australian Securities and Investments Commission (ASIC) has announced that is has secured $102 million in remediation for customers who were mis-sold funeral and life insurance policies. The policies were sold by Freedom Insurance between 2010 and 2018 and involved more than 83,000 customers.
The regulator said thousands more customers could still be entitled to refunds.
“Freedom Insurance used harmful sales practices to sell funeral, accidental death and life insurance policies to vulnerable customers,” said ASIC deputy chair Karen Chester. “They also used unfair retention practices to keep customers in the policies when they tried to cancel.”
The ASIC media release said the regulator identified the harmful sales and retention practices of Freedom Insurance in its 2018 review of the sale of direct life insurance.
The release added that this conduct was subsequently highlighted as a case study during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In response to the Commission, in 2019, ASIC announced a ban on the unsolicited cold call telephone sales of direct life insurance and consumer credit insurance.
In 2021 ASIC commenced civil penalty proceedings in the Federal Court against both the former managing director and former quality assurance manager of Freedom Insurance in relation to the sales incentive programs offered by Freedom Insurance
“We believe there are thousands of customers that likely remain entitled to a refund but they haven’t come forward to claim it” said Chester. “We encourage Freedom Insurance customers from between 2010 to 2018 who believe they were mis-sold a policy, or who tried to cancel their policy without success, to contact their insurers and be assessed for remediation.”
The release said Freedom Insurance no longer sells or administers insurance products and in 2020 its companies were placed into external administration in and have de-registered.
