TAL Direct will be giving refunds totalling about $900,000 to Insuranceline branded funeral insurance customers.
TAL reported to ASIC that it had failed to “switch off” annual cost of living increases to premiums and cover after customers reached the age of 75 for the over 50s/55s insurance plans and 80 for the Insuranceline funeral plan.
If your clients are affected and eligible for a refund, they should expect TAL to get in touch offering a refund of the portion of premiums paid for the annual cost of living increases after the relevant ages or 75 or 80.
Alternatively, they may be offered a higher level of cover and higher premiums, with no refund.
Further, TAL will also refund affected policy holders whose policies have lapsed.
Those policy holders who choose the refund will have their insurance cover reduced to the level it would have been at if the error had not occurred, ASIC confirmed in a statement today.
Broadly, insurance has been a trouble spot in financial services in recent months. ASIC has banned and penalised several advisers for faltering on their obligations when it comes to advising on insurance.
Most recently, in late February, ASIC banned a financial adviser for five years after finding he failed in his obligations to consider insurance products when switching superannuation funds.
Further, about 6 per cent of submissions received by the Royal Commission into banking, superannuation and financial services are related to the general insurance market. A further 6 per cent are related to the total permanent disability and insurance market.