MBF, Clearview the latest unit mispricers
MBF Life and MBF-owned ClearView Life Nominees are the latest in a growing line of insurance companies that have been ordered by regulators to compensate clients overcharged in administrative bungles.
This time the errors relate to customers who were hit with incorrect external management fees in the unit prices of some life insurance and superannuation products.
Compensation of the affected clients is being overseen by the Australian Prudential RegulationAuthority (APRA) and the Australian Securities and Investments Commission (ASIC), with the latter accepting an enforceable undertaking from both companies.
APRA said there was no evidence of foul play on the part of MBF Life and ClearView, which it said had fully co-operated with both regulators, having “promptly” reported the errors once they were identified.
The emergence of the errors has prompted APRA to recommend companies conduct independent expert reviews of unit pricing systems as part of their risk management practices.
“APRA would not expect an issue like this to recur within an institution and employing an independent expert would help eliminate the possibility of that happening,” said APRA deputy chairman Ross Jones.
However, Jones stopped short of saying that this recommendation could become a mandatory requirement in the future.
In the past year MLC, AMP and Tower have experienced similar problems to those currently experienced by MBF Life and ClearView.
APRA and ASIC have indicated they would be developing a joint regulatory approach to assist businesses to understand and meet their unit pricing obligations in the near future.
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