What was abundantly clear from the 18-minute sales spruik that took place in June 2016 between the sales agent and Mr Stewart’s son was bagging a sale.
It wasn’t one bad apple but a cultural issue with poor compliance and strong directives to agents:“Try your best on every single call. Every premium counts when it comes to our team targets. If you cancel a policy,remember you must offer accidental death and injury cover. You will fail your quality assurance if you don’t,” one email said.
Not surprisingly stroke victims,customers with intellectual challenges and someone who was sold a policy with 29 lives insured,were just a few of the types of vulnerable people targeted by Freedom sales agents.
In terms of misconduct it reads like the Wild West:rampant misconduct,arrant misbehaviour,a boiler room sales culture and breaches of the law where just a few of the antics at play.
It is only as the industry faces the royal commission’s glare that something is being done.
In Freedom’s case change was flagged to the royal commission at 3pm on Monday,September 10,on the eve of its appearance. It noted it would cease selling accidental death,accidental injury,trauma and life insurance through outbound calls,which represents 15 per cent of its business. Its main business,funeral insurance and loan protection insurance sold through outbound calls would remain. It also announced a change to non-monetary incentives.
A rushed decision? When Freedom was asked to hand over any documentation relating to how it came to such momentous decisions,it couldn’t. Orton said the feeling was they could make such a decision “without creating unnecessary paperwork”. His explanation prompted a laugh from the journalists in the media room.
So far the royal commission has heard a lot of witnesses using the words “inappropriate” to describe unconscionable behaviour. It has also seen a number of operations shutting,closing or selling divisions to mitigate prosecution.
Added to the mix we have seen time and again a light touch regulator that is aware of the problems – both industry-wide and within the companies themselves - but all too often hasn’t had the appetite to go in hard.
Freedom and ClearView’s direct life insurance operations have operated well below community expectations but so too has the regulator.