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Allianz to offer 15,000 insurance refunds

By Grace Ormsby · August 28 2019
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Allianz Insurance
Allianz to offer 15,000 insurance refunds

Allianz to offer 15,000 insurance refunds

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By Grace Ormsby · August 28 2019
Reading:
egg
egg
Allianz Insurance

Have you used Allianz Insurance for death or unemployment and disability cover? You may be eligible for a refund.

ASIC has reported that Allianz Australia Insurance Ltd will refund more than $8 million to 15,000 customers after a review into consumer credit insurance (CCI) by the regulator.

According to the commission, Allianz’s remediation program relates to the sale of cover to consumers who were ineligible to make a claim for unemployment or disability, the sale of death cover to customers under 21 years of age who were unlikely to need that cover, and the charging of fees to monthly paying customers without adequate disclosure.

For customers who purchased unemployment or disability insurance products, Allianz has outlined that it will refund all premiums charged plus interest for active, cancelled or lapse policies that were sold between 2011 and 2018, reassess all withdrawn and denied claims where the consumer was ineligible for a policy when it was sold to them, invite the submission of new claims and pay valid claims, continue to honour active policies and not rely on employment eligibility criteria as a basis to decline any relevant claim.

With respect to sales of death cover to customers under the age of 21, Allianz will refund all premiums charged plus interest for active, cancelled or lapsed policies sold between 2011 and 2018, and preserve existing death cover for active policyholders on current terms without charging for it.

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Any customers affected by the monthly policy payment will be refunded all administration fees and loading charged plus interest, with Allianz assuring ASIC that it will correct any future direct debit amounts.

Commenting on the remediation requirement, ASIC commissioner Sean Hughes said it was disappointing that their “work on the sale of CCI has highlighted widespread mis-selling and poor product design”.

He said the remediation outcome is only one of many examples where CCI has failed consumers.

“We expect insurers to cease to sell insurance products that provide little or no value,” he continued.

“We need a financial system that is fair,” he stated.

“Insurers and other financial institutions need to rise to the challenge and embed the principle of fairness into their businesses to ensure we do not see any further instances of this kind of poor-value product being pushed on to consumers,” according to the commissioner.

Allianz has reported that it will stop issuing new consumer credit insurance policies from 30 September 2019, but will continue to fulfil its obligations to existing consumer credit insurance policyholders.

The refunds come as ASIC consults on a proposal to ban the sale of consumer credit insurance and direct life insurance through unsolicited telephone calls

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