CommInsure sentenced and fined $700k for hawking
Colonial Mutual Life Assurance Society, trading as CommInsure, has been convicted of 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls and has been fined $700,000.
The hawking offence was contrary to the Corporations Act, an announcement by the Australian Securities and Investments Commission (ASIC) said.
The conviction and fine followed CommInsure’s guilty plea to the charges on 19 November. ASIC noted that the sentence took into account CommInsure’s early guilty plea to the charges, which carried a maximum total penalty of $1,848,750. If the conduct were to occur under the new penalty regime, effective from March 2019, the maximum penalty would be $10,962,000.
Her Honour Magistrate Atkinson of the Downing Centre Local Court in Sydney said there was a “significant need for deterrence”, and that those who market and sell insurance products “must ensure that they comply with what is important consumer protection legislation”.
ASIC deputy chair, Daniel Crennan, said: “The conviction and sentence today sends a significant message to the financial services industry. The model operated by CommInsure carried risks for consumers due to the unsolicited sale of complex insurance products which consumers may not have needed, wanted or understood”.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
