Hallmark General Insurance Company, trading as Latitude Insurance, will provide refunds of about $1.1 million to 905 customers.
Latitude “mis-sold consumer credit insurance (CCI) with Latitude personal loans”, according to ASIC, the financial services regulator.
Latitude also “incorrectly denied claims on CCI policies sold with Latitude and other credit cards”.
Consumer credit insurance is an add-on insurance that helps borrowers meet repayments if they die, suffer a traumatic illness, or become disabled or unemployed.
ASIC said that Latitude identified and reported to the regulator that, between October 2011 and June 2014, it sold involuntary unemployment insurance to personal loan customers who were ineligible to claim because they did not work the required minimum 20 hours per week.
Latitude also identified that, between May 2014 and February 2017, its partly automated claims assessment process had incorrectly denied claims to credit card CCI customers, because it failed to properly apply the exclusion definition of ‘casual employment’.
In response, ASIC said Latitude would:
- Refund premiums and interest to personal loan involuntary unemployment insurance customers who were ineligible to claim
- Pay claim amounts and interest to credit card CCI customers whose claims had been incorrectly denied
Latitude will be contacting eligible customers. Latitude customers with questions or concerns should contact the company on 1800 800 230.