The Australian Securities and Insurance Commission (Asic) has proposed banning unsolicited telephone sales of life insurance.
It follows findings from the regulator that many customers are pressured into buying complex life products that they did not need, want or understand.
Asic has now rolled out a consultation paper seeking industry views on its proposal, which would also include consumer credit insurance calls.
A ban on cold calling was recommended by the Royal Commission into misconduct in banking, superannuation and financial services.
It is also based on the recommendations that came from the Asic’s August 2018 investigation into the sale of life insurance products.
Client protection
“Asic will step in to stop practices that lead to poor consumer outcomes and destroy trust in the system,” said Sean Hughes, commissioner at Asic.
“It is only fair that consumers have a proper opportunity to consider which insurance product best meets their needs and then compare alternative products, without feeling pressured to make a purchase.
“Such a ban is consistent with the Financial Services Royal Commission recommendations, and will provide consumers with further protections from mis-selling practices now, ahead of wider law reform by government.
“Without such a ban, we are concerned that consumers will continue to be preyed upon by peddlers of inappropriate insurance products, using pressure sales tactics,” he added
Stepping in
The regulator has already taken actions against firms using cold calling to pressure clients to buy life insurance.
In February 2018, ClearView Life Assurance was ordered to give back A$1.5m (£850,000, $1.05m, €940,000) to 16,000 clients.
The consultation will be open for six weeks, with submissions due by 29 August 2019.
