POWERED BY MOMENTUM MEDIA
AMP charged clients life insurance premiums post-death
Expanding on revelations that fees were charged by a major bank to dead customers already in this Royal Commission, the inquiry today heard that AMP failed to refund members’ estates for fees charged on life insurance after AMP knew they had died.
AMP found in April that it had charged premiums amounting to almost $1 million to some 3,124 superannuation members after they had died and had not refunded those amounts. Despite discovering the issue in April, the firm did not report it to regulators until June.
As Senior Counsel assisting the Commission, Mark Costello, showed, the firm charged “premiums for life insurance where there was no longer a life to insure”.
Furthermore, the Commission heard that AMP’s practice of continuing to charge life insurance premiums after death and then refunding the payments had been in place since at least 2016, when someone filed an internal complaint on the issue.
AMP group executive, wealth solutions and customer, Paul Sainsbury, disagreed that issues had been highlighted about this in 2016, saying that the problem then was instead on whether the amounts had been refunded, rather than the charging itself. He acknowledged however, that “it is not the best way” and agreed with Costello that a more obvious practice would be to stop premiums on death rather than refunding them.
Sainsbury confirmed that AMP had only encountered this issue with AMP Life and no other insurers, but then contradicted that by saying that when other group life programs are administered through AMP’s record-keeping systems, those refunds still may not have occurred.
AMP was currently inquiring into that, and Sainsbury believed that this latest investigation suggested there were other insurers who had faced the issue.
Under questioning by Costello, Sainsbury agreed that AMP had failed to meet community standards and expectations when charging the above premiums, had failed to act sufficiently honestly and fairly, and that at least one cause of the conduct was AMP’s control systems.
Recommended for you
The insurance company has joined this year’s awards as a principal partner.
The $135 billion fund has transitioned away from TAL Life Insurance following an “extensive tender process”.
The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
