Freedom Insurance hits life sales, liquidity issues

6 December 2018
| By Mike |
image
image
expand image

Freedom Insurance Group has declared it will not be recommencing sales of its life products and encountered a liquidity shortfall relating to commission claw-backs.

As well, the company has acknowledged it is being investigated by the Australian Securities and Investments Commission (ASIC) in relation to past misconduct and that a remediation program is inevitable.

In an announcement released to the Australian Securities Exchange (ASX) today the company said it had received a strategic review, and that the Board had determined “there is no immediate commercially viable option to recommence sales of its life products”.

The announcement said, however, that Freedom would continue to assess alternative business models that might arise which would enhance shareholder value and deliver enhanced customer outcomes.

“As part of the review, the Board identified that, on a business as usual basis and in the absence of any responsive action, the company may face a liquidity shortfall during calendar year 2019 arising from the timing of payments of commission clawbacks in the absence of receipts of commissions from new business sales”.

“In this regard, the company is considering alternate options to address the potential shortfall,” the ASX announcement said. “In addition, Freedom is implementing initiatives to improve operational efficiency and reduce costs.”

“Notwithstanding this potential liquidity issue, the Board remains satisfied the company is solvent, based on the funding, efficiency and business restructuring options available.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 6 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 day 4 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 4 days ago