Regulator keeps eye on funeral insurance providers

Regulator keeps eye on funeral insurance providers | Insurance Business

Regulator keeps eye on funeral insurance providers
ASIC is continuing to engage with funeral insurance providers as part of its focus on the industry.

Concerns were raised over TAL Direct’s advertising of funeral insurance last year. These have now been resolved.

However, the regulator has now questioned TAL’s advertising of products under the brand ‘InsuranceLine’. It is concerned that premium increases and stepped premiums were not adequately disclosed or explained; qualifications relating to advertised prices were not sufficiently prominent; and qualifications relating to advertised prices were not sufficiently prominent.

ASIC’s view is there may be a risk that some consumers could be misled about these matters.
“It is important that funeral insurance ads create realistic consumer expectations, in particular about the cost of the product,” ASIC deputy chairman Peter Kell said.

TAL withdrew its existing funeral insurance advertisements in June 2013, and announced the introduction of its new range of funeral insurance products, with policy features including level premiums for the life of the policy and capped premiums.

“ASIC generally considers there are features of funeral insurance that can be particularly difficult for consumers to understand such as increasing premiums and that premium payments can exceed the actual benefit to be paid out under the policy," Kell said.

“Designing funeral insurance policies with these types of consumer risks in mind is not only likely to provide significant benefits to consumers but also likely to result in clearer advertising messages.

“ASIC will continue its focus on funeral insurance and take steps to ensure that consumers understand funeral insurance products.”