ASIC has accepted an enforceable undertaking from American International Assurance Company (Australia) Limited (AIA) and its subsidiary AIA Financial Services Limited (AIAFS). AIA is engaged in the business of issuing life insurance and AIAFS is in the business of distributing life insurance through its authorised representatives on behalf of AIA. Both companies are ultimately wholly owned subsidiaries of the American International Group, Inc., one of world’s largest international insurance and financial services corporations.
This action follows an ASIC investigation into the compliance procedures of AIA and AIAFS, and alleged market misconduct by their authorised representatives. ASIC was concerned the companies did not adequately supervise the market conduct of their authorised representatives.
ASIC was concerned that AIA did not take the steps necessary to ensure that the company’s clients, a significant proportion who are ethnically Chinese, could comprehend its English
language disclosure documents. Further, ASIC was concerned that AIA’s complaints handling system did not identify and record all oral expressions of client dissatisfaction.
AIA and AIAFS have each given an undertaking to ASIC. As part of the enforceable undertaking, AIA and AIAFS will:
- engage an independent compliance expert, approved by ASIC, to periodically conduct reviews of their compliance program and compliance documentation over three years, and to report to the companies and to ASIC on any deficiencies;
- implement any recommendations from the independent compliance expert arising from the reviews;
- maintain and regularly update their compliance program and compliance documentation to ensure compliance with legal obligations and their licence conditions; and
- require all Australian resident directors and legal or compliance staff to undertake required annual compliance or related training for the next three years.
