AMP Ltd. has admitted that it failed to ensure that its financial advisers act in the best interests of its customers when some of them advised clients to cancel and replace their existing life insurance policies to generate higher commissions, Brisbane Times reported.

The Australia-based asset manager settled legal action by the Australian Securities and Investments Commission over so-called insurance "re-writing" or "churning" that exposes customers to underwriting risks, which include varying levels of coverage in new products as opposed to their old policies.

The regulator said AMP failed to deal with the conduct that took place between 2013 and 2015. A three-day hearing has been scheduled to determine a penalty for the company.

An AMP spokeswoman said the company has stepped up monitoring and supervision of the conduct.