The Australian Securities and Investments Commission (ASIC) has banned life insurers from making cold calls to prospective customers in Australia to sell life insurance policies.
The ban, which also covers consumer credit insurance (CCI), is aimed at abolishing predatory sales practices that have caused huge uproar in the Australian insurance market in recent times.
Starting 13 January 2020, the regulation will protect the consumers from buying insurance products they did not require.
ASIC said that the ban is in line with the recommendations made by the Financial Services Royal Commission.
Commenting on the mandate, ASIC commissioner Sean Hughes said: “ASIC will intervene to stop practices that lead to poor consumer outcomes and destroy trust in the financial system.
“This action draws a clear line in the sand. From January firms will no longer be able to call consumers out of the blue and use sophisticated sales tactics to pressure people into buying life insurance and CCI products.”
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Last month, the ASIC imposed a monetary penalty of A$700,000 ($478,950) on CommInsure, the life insurance business of Commonwealth Bank of Australia, for violating an anti-hawking regulation.
At the same time, ASIC started civil penalty proceedings against Select AFSL for its unlawful telephony sales of life and accidental injury insurance.