Australian consumers have been misled by advertisements about CommInsure’s heart attack coverage in its trauma policies, the Royal Commission into banking and financial services heard today.
Entering its 53rd day of hearings, Helen Troup – the managing director of the Commonwealth Bank’s insurance arm – returned to the hot seat after being grilled by Counsel Assisting Rowena Orr QC yesterday over how CommInsure’s particular definition of a heart attack was represented to customers.
Orr presented Troupe with a series of advertisements, such as web pages, pamphlets and brochures.
CommInsure had not made it clear in these documents that ‘heart attack’ actually referred to certain types of heart attacks or heart attacks of a certain severity, Orr established.
“You accept that there was nothing in the pages that dealt with trauma cover on the website at this time that indicated that the references to heart attack were intended to cover only some types of heart attacks?” Orr asked.
Troupe replied that clicking through to the ‘Learn More’ link on the web page would direct them to the product disclosure statement, which contained the definition.
But Orr pointed out that the individual reading the advertisement would be led to believe that CommInsure’s policy covered all heart attacks.
After all, wasn’t it reasonable for a reader to expect CBA to accurately summarise key aspects of their policy in advertising material?
Yes, Troup conceded.
And was it reasonable for the consumer to expect CBA hadn’t overstated the coverage available?
Yes, Troup conceded again.
“It is not reasonable, I want to put to you, for CBA to expect a person to scroll much further down the page to click through to a [product disclosure statement] and locate the definition that will explain to them that when you refer to a heart attack, you’re really referring to a heart attack of a particular severity.”
After a long pause, Troupe replied: “I think that’s fair.”
“So do you accept that this advertisement was therefore misleading to consumers about the coverage of your trauma policies for heart attacks?”
“Yes,” Troup said.
The Royal Commission is currently in its sixth round of hearings, focusing on misconduct within insurance in the financial services sector.
Hearings resumed on Monday 10 September and will stretch until Friday 21 September.
The major inquiry has already covered the topics of consumer lending, financial advice, loans to small-medium enterprises, financial services entities in remote and regional communities and superannuation.
The general manager of insurance giant TAL, Loraine Van Eeden, took to the witness box after Orr concluded her questioning of Troup.