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Youi has also engaged an independent firm (EY) to conduct a review of sales practices in response to concerns that some sales staff were charging consumers for insurance policies without their consent to purchase. This included where consumers only made an inquiry to get an insurance quote.
ASIC was concerned that Youi’s remuneration and bonus structures incentivised sales staff to prioritise sales ahead of consumers’ interests.
ASIC noted that since its review, Youi has changed its remuneration structure and reduced the incentives provided to sales staff based on sales volumes and reviewed sales scripts and staff training. The insurer has also introduced new controls and monitoring of sales staff and made significant changes to its legal, risk and compliance capability.
EY will conduct a follow-up review to assess the implementation and test the effectiveness of the recommendations made in their initial assessment of Youi’s risk culture and review of sales practices. A final report will be provided to ASIC by 30 June 2018.
Acting ASIC chair Peter Kell said that positive consumer outcomes should be at the heart of sales structures.
“It is completely unacceptable that customers were signed up for Youi insurance policies without their knowledge or permission,” Mr Kell said.
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