Financial Rights welcomes the opportunity to comment on the Australian Securities and Investments Commission’s (ASIC’s) plan to ban unsolicited telephone sales of direct life insurance and consumer credit insurance.
Financial Rights and Consumer Action Law Centre (Consumer Action) strongly support this proposal. Consumer Representatives have advocated for a ban on unsolicited sales of these types of insurance products in multiple consultations including:
• Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) – Insurance Hearings (2018);
• Parliamentary Joint Committee on Corporations and Financial Services: Inquiry into the Life Insurance Industry (2016); and
• Senate Economics References Committee: Scrutiny of Financial Advice Inquiry: Additional terms of reference on the life insurance industry (2016).
Financial Rights has also advocated repeatedly for greater regulation around the sale of all add-on, Consumer Credit Insurance (CCI), accidental death and injury and funeral insurance products.
Unsolicited selling is an outdated and abusive practice with a significant risk of mis-selling people products they don’t want, need or understand.
We strongly support ASIC’s proposed use of its modification powers and support ASIC making the best use of its full regulatory tool box in order to protect consumers from harmful sales practices.
