Ace will remediate all customers affected by mis-selling at its subsidiary Combined Insurance, and make a donation of $1 million to financial counselling and literacy initiatives.
The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking from the insurer, which also requires the appointment of an independent expert to review Combined’s compliance systems.
The action concludes an in-depth investigation by ASIC, following allegations by whistleblowers of serious misconduct by Combined agents.
Ace admitted that a “limited number” of authorised representatives engaged in overselling policies, twisting or churning policies, and selling unsuitable policies.
It also accepted that it failed to foster and maintain a culture of compliance within Combined.
ASIC Deputy Chairman Peter Kell says it is “a clear case of how poor culture and conflicts of interest in remuneration have led to poor conduct, resulting in a financial cost to both consumers and the organisation alike.
“ASIC’s priority in this significant investigation was the affected consumers, and we have pursued the best result possible for those consumers.”
Ace, which is merging with Chubb under the Chubb brand, announced earlier this month that Combined would cease to write new business in Australia and New Zealand.