CommInsure charged over hawking

CommInsure has been charged with 87 counts of making unsolicited telephone calls to sell life insurance, and faces up to $1.8 million in penalties.

ASIC is alleging the Commonwealth Bank subsidiary unlawfully sold life insurance policies over the phone after providing CBA customer details to a telemarketing firm.

According to the corporate regulator, an agent for CommInsure - telemarketing firm Aegon Insights Australia - unlawfully sold "Simple Life" life insurance policies over the phone between October and December 2014, after CommInsure provided the firm with contact details from CBA's customer database.

ASIC believes the calls to CBA's customers were therefore unsolicited, and thus a contravention of the hawking exceptions in section 992A(3) of the Corporations Act on the part of CommInsure.

Each charges carries a maximum penalty of $21,250, meaning CBA could face up to $1,848,750 in penalties if found guilty for all counts.

In a statement to the ASX on Friday morning, CBA said it was considering the matter and would not make any further comment, though did point out it ceased telephone sales of Simple Life insurance products issued by the Colonial Mutual Life Assurance Society (CMLA) - which trades as CommInsure - at the end of 2014.

"These matters had been the subject of an investigation by the Australian Securities and Investments Commission (ASIC)," CBA said.

"CMLA reported breaches of anti-hawking provisions to ASIC."

The case will be first mentioned on November 19 at the Downing Centre Local Court in Sydney.

CommInsure was recently sold to Hong Kong-based insurance giant AIA, though delays in the deal's completion and regulatory roadblocks caused CBA to sell the business for $150 million less than originally agreed, at a new value of $2.375 billion.

When initially announced in September 2017, the sale was expected to be completed by the end of the 2018 calendar year.

Read more: CommInsureCBAASICCommonwealth Bank
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