Combined Insurance: critics say it’s tip of iceberg

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Fraud allegations against Combined Insurance have led consumer groups to suggest that fraudulent sales practices may be a common feature in the insurance industry.

A former Combine employee, whose Australian operations were merged with Ace in 2010, has accused dealers desperate to maximize commissions systematically tricking customers, including those vulnerable Australians.

Whistleblower Alison Moore told Fairfax Media that people were sold policies they didn’t need and information like medical history was intentionally omitted, rendering the cover worthless.

She said some agents are also involved in “grave building,” where deceased or imaginary clients are registered and the initial premium is paid by the agents because the commission is more worthwhile.

Ms. Moore, who has worked with the Combine for more than a decade, claims some senior management has supported the behavior and that those arrested go unpunished.

The claims relate to income protection policies that cover accident or illness, which are common insurance products.

The Australian Securities and Investments Commission (ASIC) is investigating and Combined Insurance Global President Brad Bennett has flown in from the US.

Financial rights legal center tells such practices can be far-reaching in the industry.

“In our view, when an insurance company has a conflicting commission- and remuneration-dependent distribution model, there is a high risk that consumers may be the subject of a conflict,” said attorney Alexandra Kelly. of misinformation and poor sales practices.

“We do not think these practices are limited to Combined Insurance and suspect that they are endemic.”

Ms. Kelly said ASIC needs more powers, including being able to limit certain remuneration models.

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“Remuneration conflict is not only an issue in life insurance, but it can also lead to underperforming practices and consumer outcomes in insurance in general,” she said. “Insurers must be required to ensure a basic level of suitability for customers of the products they sell.”

The Consumer Action Law Center said the revelations should come as no surprise to anyone.

“If you’re paying big commissions, it’s going to lead to some really unprofitable sales,” senior policy director David Leermakers told

“The ball is making its way back into the insurance industry’s court and it’s up to you to be willing to recognize that commissions are creating bad outcomes for customers, but also for their brands. .”

The Financial Rights Legal Center says it is currently working with a Pacific Islander who was sold an insurance policy at his home by a Cooperative representative who visited his home.

The man, who did not wish to be identified, purchased what he believed to be a life insurance policy and canceled the other insurance as a result.

About two years later, he fell and for several days was unable to walk.

However, the doctors were unable to conclude that the fall had caused his condition and his claim was denied because he had in fact purchased an accident insurance policy, in that specifically excludes disease.

“This man may be able to forgo a more suitable product for a product that would limit his benefits,” Ms. Kelly said.

Head of Asia-Pacific Combined Insurance Chris Carey said insurance is mainly sold by local agents who meet personally with customers.

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“We are concerned and anxious to learn when any of our customers have not been treated appropriately by one of our representatives,” he said in a statement.

“Incorporated has extensive compliance systems and processes in place to protect our customers and ensure we treat all customers fairly, fulfill our claims payment obligations, and remain fully compliant. both the text and the spirit of the law.”

He said compliance processes have been enhanced and the company will work with ASIC to determine if additional changes are needed.

Insurance Council of Australia (ICA) tells it cannot comment on the activities of individual insurance companies.

A spokesman said: “Following the outcome of ASIC’s investigation, the ICA will look into whether there are any systemic issues for insurers in general that need to be addressed.

Slater & Gordon says clients who believe they have been unfairly denied a Combined Insurance claim should contact the law firm.

“If a customer tells an employee or agent of Combined Insurance information about their medical history or income, but that information is not included in the insurance application, Combined Insurance is deemed to know that information,” it said.

“Unfortunately, we see cases like this often. They are not limited to Combined Coverage. “

ASIC declined to comment on its investigation, and Ace declined to answer specific questions or add anything to Carey’s statement.

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