1. Funeral Products – Session 2
Philippa Heir
Senior Solicitor (Insurance)
18 April 2017
Consumer Action Law Centre Worker advice line:
Rural access:

2. Welcome

3. Technical set-up
Type your question or comment here
Then press send .

4. Learning Outcomes Identify systemic issues
Identify the main funeral products and the pros and cons of each
Identify and apply relevant Consumer Law
Identify appropriate avenues for consumer complaints
Advocate effectively for clients experiencing difficulty with contracts

5. Session overview Recap of Pre-webinar session
Types of funeral products
Systemic issues
CentrePay – What has happened?
Video case study: Decision-making
Assisting your client
Audio case Study: I’ve been paying premiums for years
Seeking refunds: legal context
Making a complaint
Session review

6. Recap of Pre-webinar tasks
Types of Funeral Products
Funeral Insurance
Pre-Paid Funeral
Funeral Bond
Other funeral payment alternatives
Savings account
Superannuation
Department of Veterans' Affairs
Centrelink

7. Recap of pre-webinar tasks – What does the Barefoot Investor think of funeral insurance?

8. Recap of Pre-webinar tasks
Systemic issues
ASIC Report 454: Funeral Insurance A Snapshot identified key issues:
Rising premiums
High cancellation rate (particularly by Indigenous consumers)
Many very young Indigenous consumers signing up

9. Funeral Insurance and CentrePay

10. Video recap Age: 46 Occupation: Casual Labourer
Income: $1,350 per fortnight

11. Quick break

12. Assisting your client

13. Case Study: “I’ve been paying premiums for years”
Janet is concerned about increases in her funeral insurance premiums and has come to you for advice about her options. At your request, Janet’s insurer:
sends you a recording of the initial sales call
tells you that she has paid a total of $7,325.34
tells you her premiums are stepped and she also has inflation protection.
Listen to the recording of the sales call
What are Janet’s options?
What arguments does she have to support a request for a premium refund?
If the insurer refuses to provide a refund, what can she do?

14. Seeking refunds: legal context
Misleading and deceptive conduct
Unconscionable conduct
Breach of duty of good faith
Unsolicited sales legislation

15. Seeking refunds: legal context
Misleading and deceptive conduct
An insurer must not engage in conduct that is misleading or deceptive or that is likely to mislead or deceive.
You must show that the consumer relied on the relevant statement in making his or her decision to take out the policy.
Also see Life Insurance Code – must be clear and not misleading (from 1 July 2017)

16. Seeking refunds: legal context
Unconscionable conduct
Conduct may be unconscionable if it is particularly harsh or oppressive. Must be more than simply unfair—it must be against conscience as judged against the norms of society.
Must show that the conduct influenced the consumer’s decision to take out policy.
Also see Life Insurance Code promise – honest and fair (from 1 July 2017)

17. Seeking refunds: legal context
Breach of duty of good faith
Under Section 13 of the Insurance Contracts Act 1984 (Cth) - implied term of the contract is that both parties must act with utmost good faith.
Utmost good faith is defined as acting with fairness and honesty
*Note: Unfair contract terms legislation does not apply to insurance contracts

18. Seeking refunds: legal context
Unsolicited sales - Financial Products
General ban on unsolicited sales of financial products
Telephone call may be exempt (see Practice Note for relevant factors)
Consequences of breach
Penalty provisions eg fines or even jail
Might extend cooling-off for further month
Might be relevant to unconscionable conduct

19. Financial hardship
Insurers to comply with Life Insurance Code of Practice by 1 July 2017

20. Case Study: “I’ve been paying premiums for years”
Janet is concerned about increases in her funeral insurance premiums and has come to you for advice about her options. At your request, Janet’s insurer:
sends you a recording of the initial sales call
tells you that she has paid a total of $7,325.34
tells you her premiums are stepped and she also has inflation protection.
Listen to the recording of the sales call
What are Janet’s options?
What arguments does she have to support a request for a premium refund?
If the insurer refuses to provide a refund, what can she do?

21. Case Study: “I’ve been paying premiums for years”
Janet’s options
Continue paying
Cancel and cut her losses
Negotiate terms eg. reduction in premiums or change from stepped to level premiums
Request refund of premiums for breach of the law

22. Making a complaint Prepare IDR EDR Gather evidence Identify arguments
Complaint to insurer
If unsuccessful can progress to EDR
EDR
FOS
Power to order remedies

23. Making a complaint Prepare
Ask your client how they came to take out the product Eg. were they approached?
Request copies of all communication btw insurer and client including call recordings
Request copy of insurance schedule, policy wording and PDS
Listen to recordings and read correspondence

24. Making a complaint Internal Dispute Resolution (IDR)
Set out all the arguments/concerns in a letter to the insurer
Insurer has 45 days to provide final response to complaint
If unsuccessful at IDR or 45 days passes without response, the insured can complain to the Financial Ombudsman Service (FOS).

25. Making a complaint External Dispute Resolution (EDR)
FOS has jurisdiction over life insurance
Power to order remedies including the payment of money, rectification/re- instatement of contract, compensation
Opportunities to resolve informally
Must complain within 2 yrs of IDR response
Must complain within 6 yrs of loss/when loss was reasonably apparent

26. Session review Types of funeral products – pros and cons
Systemic issues
Assisting your client
Decision making
Legal context for seeking refunds
Options for making a complaint

27. Session review
What’s the next session about?
Any questions?

28. Call us! Consumer Action Law Centre Level 6, 179 Queen Street
Melbourne VIC 3000
Worker Advice Line: (03)
Rural access:
Mon – Fri 10am to 1pm and 2pm to 5pm