Risk Regulatory Update
/CBA pleads guilty for credit insurance criminal acts
The Commonwealth Bank of Australia (CBA) has admitted to making false or misleading representations to 165 customers during the process of selling consumer credit insurance to the tune of 30 criminal charges. The offences relate to the supply of CreditCard Plus and Loan Protection policies sold by phone and online.
Across a four year period, CBA told customers they could make a claim against their policies when some or all the claims were not available to them. Consumers were sold insurance they had no use for. The conduct was revealed at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
APRA assessing risk culture at 60 companies
The Australian Prudential Regulation Authority (APRA) is assessing and benchmarking the risk culture at 60 superannuation, insurance and banking firms across the coming year in the risk culture survey. A pilot survey was conducted across 10 general insurers earlier in 2021. The survey consists of 40 questions sent to over 11,500 respondents. The response rate was 62 per cent.
The lowest scores were found in risk governance and controls, decision-making and challenge, and responsibility and accountability. The survey will be rolled out to some banking entities in the last quarter 2021, insurance entities in the first quarter of 2022, and superannuation entities in the second quarter 2022.
Centurion Wealth Advisors sues AMP for breach of contract
One of AMP’s financial advisory companies, Centurion Wealth Advisors, is suing AMP for breach of contract, unlawful interference with contractual relations and unconscionable conduct after Centurion had their contract terms adjusted in 2019. The lawsuit was lodged in September after a series of communications between the two companies across 2021.
FASEA financial adviser exam pass rate just 65% in September
The Financial Adviser Standards and Ethics Authority (FASEA) has released the financial adviser exam results for September, with a very low first-try 65 per cent pass rate. The average pass rate is 78 per cent across all exams. When the 32 per cent of exam-takers doing resits are included, the pass rate was just 61 per cent.
IAG responds to ASIC court case
Insurance Group Australia (AIG) has been subject to civil proceedings by the Australian Securities and Investments Commission (ASIC) against a subsidiary. ASIC alleges that AIG failed to honour discount promises to customers to the tune of $60 million across a five-year period. ASIC alleges that some NRMA Insurance customers were told they were eligible for certain discounts on renewal of their home and motor insurance policies, but the discounts were never applied. Almost 600,000 customers were affected across over 700,000 individual insurance policies over 1.7 million times. AIG self-reported to ASIC.
