ASIC is continuing to monitor the sale of consumer credit insurance policies.

ASIC reviewed the sale of consumer credit insurance in Report 256 Consumer credit insurance: A review of sales practices by authorised deposit-taking institutions and Report 361: Consumer credit insurance policies: Consumers’ claims experiences.

The issues identified by ASIC focus on whether consumers are being sold products they could not claim on (see Cash Store sequel) and whether they hold other financial products that offer similar cover and/or whether there are other financial products that better suit their needs.

Recently ASIC announced that Westpac has agreed to refund CCI premiums for more than 10,600 insurance customers for insurance cover they did not need. Westpac charged customers for loan protection insurance for home loans while the customer did not have a loan on foot and where the customer did not intend to be covered for that period.

An ASIC surveillance uncovered that Westpac may have been collecting premiums from some customers for a CCI policy over a period when the customer did not have a home loan. In particular, ASIC was concerned that Westpac had been collecting premiums for these products:

• before a home loan was drawn down,
• after a home loan was repaid, or
• where a customer did not go ahead with a home loan.