Insurance industry to cop big shake-up
have identified a small number of homes and businesses connected to the NBN fixed wireless network which may be experiencing congestion at certain times of the day,” he said.
“This is certainly not a widespread issue and is isolated to less than 6 per cent of cells nationwide.”
The spokesman said an upgrade of the Guanaba tower was expected to be completed by November this year. HIGH-PRESSURE sales tactics and low payout rates are among concerns that have prompted the corporate watchdog to restrict sales of life insurance polices, including accidental death and funeral insurance, through call centres.
An investigation by the Australian Securities and Investments Commission found life insurance policies sold through direct “cold-call” staff had the lowest percentage of successful claims, with only 58 per cent paid out. About 27 per cent of claims for policies sold directly to consumers were rejected or withdrawn because they did not cover what consumers thought, ASIC said.
“Aggressive selling practices and products that don’t pay out when consumers expect undermine trust in the industry,” ASIC chair James Shipton said yesterday.
The industry shake-up follows an investigation in to direct sales, or cold-calling, by 11 insurance companies.
ASIC had listened to more than 540 recorded sales calls, Mr Shipton said. It identified “a failure by all firms to provide adequate information about important aspects of the cover, including key exclusions and future premium increases”.
Four of the companies also engaged in pressure sales techniques, such as refusing to send out paperwork unless the consumer committed to buying.
More than half the companies offered bonus payments to sales staff based on the number or value of policies sold.
“Sales of accidental death insurance were particularly problematic, including where consumers were downgraded to accidental death after being rejected for comprehensive life insurance,” Mr Shipton said.
Accidental death – a type of life insurance that has very narrow coverage – offered “little value”, with a successful claims ratio of only 16 per cent, he said.
About 20 per cent of policies sold directly to consumers were cancelled within the cooling off period, its investigation found. Another 25 per cent were cancelled within a year while 60 per cent were cancelled within three years.