CommInsure has been fined $700,000 after pleading guilty to hawking offences.
The Colonial Mutual Life Assurance Society - a Commonwealth Bank subsidiary trading as CommInsure - has been convicted of 87 counts of offering to sell insurance products in the course of unlawful, unsolicited telephone calls.
Otherwise known as hawking, the conduct contravenes section 992A(3) of the Corporations Act. The firm made an early guilty plea to the charges earlier this month, which carried a maximum total penalty of $1,848,750.
ASIC noted that if the conduct had occurred under the new penalty regime effective from March 2019, the maximum total penalty would have been $10,962,000.
In handing down her sentence, Magistrate Atkinson of Sydney's Downing Centre Local Court said there was a "significant need for deterrence" and added those who market and sell insurance products "must ensure that they comply with what is important consumer protection legislation."
ASIC deputy chair Daniel Crennan added the fine would send "a significant message" to the financial services industry.
"The model operated by CommInsure carried risks for consumers due to the unsolicited sale of complex insurance products which consumers may not have needed, wanted or understood," Crennan said.
In a statement to Financial Standard, the Commonwealth Bank said it was aware of the seriousness of the conviction, and added it was committed to comprehensively addressing past failings and providing compensation where things have gone wrong.
"We note the fine of $700,000 that has been applied in court today. The penalty relates to sales of a product called Simple Life conducted by Aegon Insights on behalf of CommInsure between October and December 2014, when it ceased all outbound telemarketing of life insurance," a Commonwealth Bank spokesperson said.
"We're aware of the seriousness of the conviction, and we apologise to all customers affected by this case."
The bank added that it was focused on remediating customers affected customers, which it expects will be finalised by the end of year, with most payments already made.