The Hayne Royal Commission is now looking into the insurance sector and claims of mishandling various claims.
In other segments of the inquiry, we have learned of problems relating to financial advice and the structure of commissions and remuneration.
What’s Going On With CBA, Clearview & Freedom?
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On Monday, Clearview Wealth Ltd (ASX: CVW) was under the spotlight. It admitted to over 300,000 breaches of anti-hawking laws and was flogging lower-quality life insurance to poor people. Insurers are not allowed to cold-call people and getting them to take up insurance they do not want or need according to Section 992A of the Corporations Act.
The Clearview share price is down by about 5% compared to a month ago, though it has recovered by 16% since a low earlier in the week.
On Tuesday, Freedom Insurance Group Ltd (ASX: FIG) was accused of selling policies for accidental death and injury policies as alternatives to life insurance policies, which didn’t cover as much. The Commissioner also heard of a case where someone with Down Syndrome was “bulldozed” into getting insurance.
The Freedom Insurance share price is down over 66% since this time a month ago.
On Wednesday we heard Commonwealth Bank of Australia’s (ASX: CBA) CommInsure had been using an outdated medical definition of heart attacks and didn’t update the meaning due to commercial interests. This led to a case where someone was only paid $10,000 of a $100,000 policy.
On Thursday, the Royal Commission learned that TAL engaged a private investigator for $20,000 to follow a nurse and somehow void the $792,000 that the insurer could have to pay her.
Today, we have heard how TAL cancelled a woman’s policy because she was diagnosed with cervical cancer but also allegedly had a history of depression. TAL cancelled the policy due to the depression, even though the claim was for cervical cancer.
What Now?
In the second half of November, we will enter the final round of hearings. The seventh round of public hearings will focus on policy questions arising from the first six rounds.
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