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Connexus : Issue 39
www.abacus.org.au 25 interested in purchasing CCI. Other recommendations involve interest pay ments, separate quotes for policies sold in conjunction with a credit product, disclosure of the premium’s structure, the duration of CCI policies, evidence of consent to purchase CCI, and the timing of product disclosure statements being made available to consumers. ASIC says distributors should provide regular training programs for staff and monitor sales activity for non-compliance. Any “myster y shopping exercises” or sales verification calls should also be carefully reviewed. Funston says Abacus will look at what it can do to help members comply with the recommendations. “We hope there will be support from the insurance industry in this regard,” he says. Sue Peacock is a freelance writer. What the insurers say The introduction of best-practice standards from the ASIC review of CCI is a welcome development, says St Andrew’s Australia chief executive Renato Mazza. “ We are working closely with our corporate partners and providing compliance support where it is needed,” he says. “ This is our core business and we are able to act quickly to make changes and tweak products where that may be needed.” St Andrew’s sells a lot of mortgage protection insurance, but it had not experienced high cancellation rates or complaint levels, he says. “ASIC’s findings are certainly not our experience. With the majority of our products, people have to sign documents and they are considering it more carefully than perhaps they would if they were applying for credit card protection over the phone.” He says there is no standard CCI product because insurers’ products often vary depending on who their corporate partner is. Because Abacus members provide more personal services, they are less likely to have issues with CCI, he says. Allianz Australia “ fully supports” ASIC’s recommendations, says Michael Winter, Allianz general manager financial institutions .“The recommendations are designed to improve the way CCI is sold. Our existing sales practices largely comply with the requirements, so we don’t see them being a major change.” Winter says CCI sold in conjunction with credit cards has caused most of the problems. “CCI sold alongside credit cards is not big business for most of the credit unions and building societies. Most of their CCI is sold alongside mortgages and personal loans, which involves a more detailed conversation with the customer that leads to appropriate transparency and disclosure.” Allianz has reviewed and amended its sales scripts, and developed new CCI product and sales training, in response to the recommendations. The national roll-out of the changes will begin in April. At CGU Insurance, Jeff Harris, national CCI manager, says ASIC’s review was warranted, given the aberrant behaviour in the sector, but it didn’t reflect what was happening across the broader market. “ Very high claim denial rates were quoted and highlighted by ASIC, but they weren’t from partners we do business with,” he says. “If they had been, we would have done something about it. As ASIC rightly pointed out, they were excessive denial rates.” Most of CGU’s partners are in the credit union, building society and mutual sector, and the insurer is comfortable with their conduct, he says. “We continue to consult with our partners and work with them on their own responses to the review – on things like scripts where phone sales take place, and on fact sheets for sales people to be able to refer to in discussions.”