Allianz Australia Insurance Ltd. will stop issuing consumer credit insurance policies starting Sept. 30.
The Allianz Group unit will also refund more than A$8 million in consumer credit insurance premiums and fees including interest to more than 15,000 consumers. The refund is connected to the sale of cover to consumers who were not qualified to make a claim for unemployment or disability, sale of death cover to customers under 21 years old and unlikely to need the cover, and charging of fees to customers who paid premiums by the month without adequate disclosure.
The remediation program includes certain consumer credit insurance products issued by Allianz Australia, as well as mortgage and loan protection policies sold through financial institutions. From October, the insurer will inform all affected consumers regarding their refund offer.
The actions come after the Australian Securities & Investments Commission's review of the sale of consumer credit insurance covering the period 2011 to 2018. Through the review, the regulator discovered that consumer credit insurance sales practices and product design continues to deliver poor outcomes for consumers. The commission also started enforcement investigations into some entities that were involved in misselling the insurance policy.
