In response to concerns raised by ASIC, Hollard Financial Services Pty Ltd (HFS) has agreed to implement changes to the way it promotes its ‘Real Funeral Expenses Cover’ product.

ASIC has previously stated that the funeral insurance industry is not being sufficiently clear in advertising and disclosing key aspects of its products to customers (discussed here).

ASIC was concerned that in HFS’s advertising dealing with the price of the product:

• there was insufficient information about premium increases
• some qualifications regarding price were inadequate. This included, in some cases, a lack of clarity about who minimum quoted prices applied to, and in some advertisements not including relevant information prominently enough, and
• prior to May 2012, prices quoted were not representative of imagery used in advertising. For example, actors’ ages.

ASIC’s view was there was a risk that some consumers may be mislead about these matters.

HFS has agreed to make a number of changes to its advertising, including:

• prominent disclosure that premiums increase with age
• where prices are promoted in advertising, prominent disclosure about the key assumptions the price is based on, for example, age and benefit amount
• using imagery in advertising that is consistent with other representations made in advertising in relation to price, and
• disclosing risks associated with the product, including the risk that consumers may pay more over time than the benefit they will be entitled to, and that consumers are not entitled to a refund of premiums paid if they decide to cancel.