Insurer OnePath to refund $35m after ASIC targets pressure selling tactics

ANZ’s former life insurance arm OnePath will be forced to repay more than 40,000 customers after the corporate watchdog said it had used egregious tactics to sell policies.

ANZ sold OnePath to Zurich in 2019.

ANZ’s former life insurance arm OnePath will be forced to repay $35m to more than 40,000 customers after the corporate watchdog said it had used egregious tactics to sell policies.

The Australian Securities and Investments Commission said OnePath, which was sold to Zurich in 2019, had caused extensive harm to customers with pressure selling tactics, failure to provide information about policy exclusions and leading the consumer to believe the salesperson was calling from ANZ Bank with a special offer. At the time, OnePath was owned by ANZ but operated as a separate business.

OnePath is now refunding premiums, with interest, to customers who had purchased a life insurance policy that had lapsed or was cancelled within two years of the sale.

It also was reviewing past complaints and claims and waiving certain conditions for affected customers who still held an active policy.

ASIC deputy chair Karen Chester said that despite OnePath offering refunds to around 26,000 customers, less than half had banked their cheque or arranged for the funds to be deposited into their bank account.

OnePath is writing to affected customers who purchased a life insurance policy between 2010 and 2016 with information about the refunds.

Ms Chester said ASIC was tackling misconduct in the direct life insurance market following the Hayne Royal Commission into the financial sector.

Earlier ASIC launched criminal proceedings against CommInsure for hawking of life insurance that had resulted in a conviction against the company for 87 counts of breaches of the law.

It also had launched civil penalty proceedings against insurance providers Select AFSL, BlueInc Services, Insurance Marketing Services and director Russell Howden.

“ASIC has delivered compensation to tens of thousands of consumers who have suffered harm,” said Ms Chester. “Better industry practice and improved consumer outcomes follow ASIC’s three years of concerted regulatory action.”

She said ASIC’s review had helped gather evidence for several Hayne Royal Commission misconduct case studies. “Our review uncovered egregious sales practices with tens of thousands of consumers paying for products they did not want, did not need or were not suitable for them,” Ms Chester said.

Originally published as Insurer OnePath to refund $35m after ASIC targets pressure selling tactics