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MLC Life fined $10m for misleading customers
The Federal Court has ordered MLC Limited pay a $10 million penalty for failing to pay promised benefits, resulting from a lack of appropriate systems to administer its insurance policies.
Additionally, MLC Life also provided approximately $11.8 million in remediation to approximately 1,000 impacted customers.
The Federal Court made declarations that MLC Life had contravened the Corporations Act, the ASIC Act, and the Insurance Contracts Act for failures to:
- pay a rehabilitation benefit to almost 120 customers who had undertaken approved rehabilitation programs following injury and/or disability;
- have adequate processes to review and, if appropriate, promptly update its medical definitions for critical illnesses in certain policies; and
- adequately train and monitor staff about communications to customers regarding the administration of their policy, including policy schedules and premium notices.
“Customers should be able to trust that their insurer will pay the benefits promised to them and keep them properly informed if there are changes to their policies,” ASIC Deputy Chair Sarah Court said.
“The failings recognised by the Court are the result of poor governance, poor controls and poor systems, such as legacy IT systems. MLC customers deserve to have their insurance policies administered properly”.
The corporate regulator added it would continue to take action against insurers who did not act in accordance with their duty of good faith to their customers.
Along with the penalty, the Court ordered MLC Life to publish an adverse publicity notice on its website.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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