The Australian Securities and Investments Commission (ASIC) has invited public comment on its plan to ban unsolicited telephone sales of direct life insurance and consumer credit insurance (CCI).
In a statement, ASIC said such a ban would prevent the sale of complex insurance products which consumers did not need, want or understand.
ASIC Commissioner Sean Hughes said it a consultation paper had been issued seeking views on the proposed ban.
“ASIC will step in to stop practices that lead to poor consumer outcomes and destroy trust in the system,” Mr Hughes said.
“It is only fair that consumers have a proper opportunity to consider which insurance product best meets their needs and then compare alternative products, without feeling pressured to make a purchase.”
He said such a ban was consistent with the Financial Services Royal Commission recommendations and would provide consumers with further protections from mis-selling practices now, ahead of wider law reform by Government.
“Without such a ban, we are concerned that consumers will continue to be preyed upon by peddlers of inappropriate insurance products, using pressure sales tactics,” Mr Hughes said.
He said the Royal Commission recommended the law be changed to clearly prohibit unsolicited sales of superannuation and insurance products.
“The Government has committed to implement this recommendation – in the meantime, ASIC’s ban will protect consumers where we have identified ongoing sales issues and have evidence of consumer harm,” Mr Hughes said.
ASIC’s 20-page consultation paper can be accessed at this PS News link.
Comments will be accepted until 29 August.
