AMP Financial Planning has attempted to qualify its admission to so-called insurance churn allegations by the corporate watchdog, suggesting it might not have admitted to “all contraventions” if it had known ASIC would push for up to 120 separate breaches and $36 million in penalties.
The corporate watchdog has proposed a complete ban on unsolicited telephone sales of life insurance and consumer credit insurance, as an urgent placeholder ahead of wider reforms recommended after last year’s banking royal commission.
We have started to see the Federal Court use its discretionary powers in respect of class actions to order defendants to disclose their insurance policies to plaintiffs. The emergence of these disclosure orders is an example of the flexible and pragmatic approach increasingly being adopted by the Federal Court in class actions, say Johnson Winter & Slattery’s Frances Dreyer and Nicholas Briggs.
The corporate watchdog has warned “robust” enforcement action is on the cards for banks and lenders, after a review found consumer credit insurance policies to be “extremely poor value for money”, paying out as little as 11 cents per dollar spent in premiums on average.
The funder backing the IAG add-on insurance class action has agreed to a fixed 25 per cent commission, after the plaintiff copped criticism from a judge for the largely redacted funding agreement which called for lower rates if the case settled by a certain date.
The Australian Securities and Investments Commission has asked a court to impose penalties of up to $36 million on an AMP subsidiary for failing to take reasonable steps to stop its representatives from churning life insurance policies.
AIG Australia has failed to convince the Full Federal Court that an insolvency exclusion in a directors and officers policy held by Kaboko Mining should exempt it from covering claims brought by the collapsed mining company against four former executives after a failure to repay a US$5.95 million loan allegedly led to the company’s insolvency.
The National Australia Bank has filed a lawsuit against its Singapore-based captive insurance unit and three syndicates of global insurance giant Lloyd’s seeking coverage for two consumer redress schemes related to the bank’s sale of interest rate hedging products and fixed rate tailored business loans.
A judge has raised questions about a redacted funding agreement in a class action against two IAG units over allegedly worthless add-on insurance products, saying the details were needed for a swift resolution of the case.
AMP’s financial planning unit has admitted it breached the Corporations Act when at least one of its representatives engaged in so-called insurance policy churning, in a case brought by the Australian Securities & Investments Commission that will now head to a hearing on penalties next month.