Superannuation giants Colonial First State and AMP are facing the threat of a class action for charging “exorbitant” fees and delivering poor returns.
As the banking royal commission reconvenes and turns the spotlight onto insurance companies, The Age is reporting that law firm Slater & Gordon has revealed it is seeking expressions of interest for a class action against a number of financial institutions in the wake of damaging revelations about their treatment of customers.
“In a statement, the company said the first targets would be the Commonwealth Bank of Australia-owned Colonial First State and AMP,” The Age reports.”
“It would be alleged the companies charged their clients “exorbitant” fees and failed to achieve competitive returns from their cash investments.
“Branding the campaign under the title ‘Get Your Super Back’, the company said the action would be brought ‘on behalf of millions of Australians in bank-owned super funds’.”
Meanwhile, the banking inquiry is reviewing the practices of leading insurance companies, including AIA, Allianz, AMP, CommInsure, IAG, MLC, ANZ’s OnePath and Suncorp.
The commission has received more than 8700 public submissions, including 681 relating to life insurance.
An estimated 16.9 million life insurance policies in Australia collect $18.3 billion from customers every year. Most are part of superannuation policies.
Counsel assisting the commission Rowena Orr said 10 major life insurers had paid more than $6 billion in commissions to financial advisers over a five-year period.
She listed some of the misconduct insurers had already admitted:
Clearview – 303,000 criminal breaches over its cold-calling practices.
NAB – 37 insurance-related incidents of misconduct or conduct below community standards.
Allianz – failed to respond to 6000 claims within 10 days, as required by the regulator.
AMP – churned clients from one life insurance policy to another in order to collect commissions.
CommBank – 60 instances of misconduct, including more than 30 relating to life insurance, such as using outdated medical definitions for conditions such as heart attack and rheumatoid arthritis in its trauma policies.
TAL – 31 cases of misconduct, such as misleading television and online advertisements.
IAG – 112 examples of misconduct, including some “systemic issues relating to its sale process and handling of claims” as recently as last week.
Ms Orr said the treatment of mental health and pre-existing conditions featured in a significant number of submissions.
“Common themes in the submissions addressing mental health are consumer experiences in being denied coverage or benefit on the basis of mental health exclusions, excessive premiums being charged where mental health issues are disclosed, claims of mental health conditions being exacerbated as a result of claims handling processes, and concerns over independent medical examinations,” she said.
Does the class action interest you? Have you had an issue with your insurer?