Hundreds of Latitude Insurance customers will be refunded a total of $1.1 million after the insurance provider mis-sold consumer credit insurance with personal loans.
Hallmark General Insurance Company Ltd (which trades as Latitude Insurance) will refund 905 customers after it mis-sold consumer credit insurance (CCI) with Latitude personal loans and denied insurance claims made on CCI policies sold with the Latitude loans and other credit cards.
CCI is an add-on insurance that protects loan repayments if a consumer dies, suffers from a traumatic illness or becomes disabled and can no longer meet loan repayments.
Latitude Insurance reported to the Australian Securities and Investments Commission (ASIC) that, between October 2011 and June 2014, Latitude Insurance sold involuntary unemployment insurance to personal loans customers who did not work the required minimum of 20 hours per week and who were therefore ineligible to claim the insurance.
Further, between May 2014 and February 2017, credit card and CCI customers were incorrectly denied claims by its partly automated claims assessment because it failed to properly apply the exclusion definition for “casual employment”.
Latitude Insurance therefore said that it would refund premiums and interest to personal loan involuntary unemployment insurance customers who were deemed ineligible to claim, with customers also being given the option to retain their policy without being subjected to minimum working-hour requirements for past or future claims.
The insurer will also pay claim amounts and interest to CCI and credit card customers who were previously denied.
“Customers should always be confident that when they come to claim on their insurance, their claim will be properly assessed,” ASIC chair Peter Kell said.
Latitude Insurance said that it would be contacting customers that are eligible for a refund.
If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.
A former broker head has returned to MyState Bank to tackle turna...
The leading brokers in South Australia and the Northern Territory...
The complaints authority has named a new executive general manage...