# Royal commission: Australia’s biggest insurers admit to misleading claims, coercing customers into signing up to policies
The latest round of the royal commission has begun with a long list of confessions from insurance companies - from misleading claims to coercing customers into signing up to policies.
Insurers including AIA, Allianz, AMP, CommInsure, IAG, MLC, ANZ’s OnePath and Suncorp owned up to a slew of bad behaviour over the past decade.
The first company in the commission’s firing line, ASX-listed insurer ClearView Wealth, disclosed 225 instances of misconduct or conduct falling below community standards in its life insurance business - including one instance of false and misleading information being provided to a customer.
ClearView said another customer was coerced into taking out a policy.
ClearView and Freedom Insurance Group will be examined over their sales practices, including unsolicited sales calls.
Meanwhile, major insurer QBE did not admit to any misconduct or behaviour falling short of community expectations - instead outlining a number of ‘issues’, including selling add-on car insurance that was of little or no use to customers.
“Its gap protection and consumer credit insurance products have been sold through car dealerships in circumstances where there might not have been a gap between the insured value of the car and the loan balance, where the customer had paid a large deposit for the car, where the cover may have duplicated existing cover, or the cover may have provided more insurance than was necessary,” said Rowena Orr QC, senior counsel assisting the commission.
QBE estimates that more than 28,000 customers will be paid $15.9 million in remediation.
Delivering her opening statement, Ms Orr said more than 110 witness statements would be submitted as evidence over the next fortnight.
## $6 billion pay day for advisers selling life insurance
The first week of hearings will be dominated by life insurance, with sales tactics, poor product design and the claims handling process flagged as lines of inquiry.
The commission has received more than 8,700 public submissions - 681 of which relate to life insurance.
Ms Orr said the treatment of mental health and pre-existing conditions featured in a significant number of those 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,” Ms Orr said.
The inquiry heard certain life insurance products were exempt from a ban on conflicted remuneration until the start of this year, when caps were introduced.
Ms Orr said 10 major life insurers had paid more than $6 billion in commissions to financial advisers over a five-year period.
“As the cap on upfront commissions continues to reduce over the next few years, it remains to be seen whether this will be reflected in the premiums paid by customers,” she said.