1.2 Evidence

Prior to 2011, ClearView operated as acaptive insurer, selling life insurance products to customers of the corporate group of which it formed part most recently, Bupa.[1] By 2013, ClearView had expanded into amore substantial and professional direct life insurance business, and was selling policies to non-Bupa sourced customers.[2] At that time, ClearView established a sales centre in Parramatta.[3] In 2014, ClearView expanded its direct life insurance operations by investing in an outsourced Melbourne-based sales centre called YourInsure.[4] ClearView closed this business in late 2015.[5]

For the period that ClearView was directly selling life insurance, ClearView sold a range of life insurance products through outbound telephone sales, including life cover, trauma cover, funeral cover and accidental death cover.[6] At the time of the sixth round of hearings, ClearView was continuing to sell a number of similar products through its retail channel.[7]

During 2015 and 2016, ClearView had made changes to its business to target more affluent customers.[8] By mid-2016, ClearView had decided to revise its operating model by moving from ahigh volume, low valuemodel involving emotional sales pitches and above-market pricing, to alower volume, higher valuemodel, in which products were pitched using both emotional and rational arguments and sold at market price.[9] Mr Martin accepted that, for the period that ClearView was operating under the former model, the life insurance products that ClearView sold in its outbound telephone sales were more expensive and of lower value than the products they were selling to more affluent people through other channels.[10] ClearView ceased direct sales of life insurance in mid-2017, for reasons that are discussed below.[11]

1.2.1Accidental death policies

One of the products that ClearView sold through its direct life insurance business, and which it continued to sell through its retail channel at the time of the hearings, is accidental death cover.[12] Accidental death policies pay out upon a person’s death where that death is due to an accident.[13] At least at the time of the hearings, ClearView’s practice in its adviser sales channel had been to always offer an accidental death policy to a customer whose application for life cover was declined for medical reasons.[14]

Mr Martin said that he was aware of ASIC’s view that accidental death policies offer a very limited benefit to consumers.[15] He accepted that the number of claims made under ClearView accidental death policies was low compared to the number of policies sold.[16] He also accepted that the claims ratio for accidental death policies was low:[17] the ratio of claims paid out to premiums collected over the last five years was 26%,[18] and in 2014, the ratio was 1%.[19] Asked whether ClearView would continue to sell such products in light of ASIC’s views,[20] Mr Martin said that ClearView had not yet reached a position on this, but that if ASIC and society would like ClearView to stop offering the product, it would do so.[21]

1.2.2ASIC engagement anti-hawking

In April 2016, ASIC raised concerns with ClearView about unsolicited telephone sales conducted in breach of the requirements of the Corporations Act 2001 (Cth) (the Corporations Act).[22] ASIC’s concerns related to whether ClearView’s sales were properly characterised as either ‘solicitedorunsolicitedsales, and, if the latter, whether they met the requirements in section 992A(3) of the Corporations Act, the anti-hawking provision.[23] In December 2016, ASIC and ClearView participated in a conference call in which ASIC raised multiple concerns about possible contraventions of the anti-hawking provision, a criminal offence provision.[24] These included concerns that ClearView did not always provide a product disclosure statement (PDS) to customers before they became bound to acquire the product, that customers were not always offered the opportunity to have information contained in the PDS read to them, and that customers were not always offered an opportunity to be placed on the Do Not Call Register.[25] Later that month, ClearView lodged a breach notification with ASIC in relation to likely non-compliance with the anti-hawking provision over a period of about two years.[26] The breach notification did not specify the number of calls estimated to have been affected.[27]

Following this, ASIC and ClearView exchanged correspondence about the number of calls affected, and about the ways in which those calls were affected.[28] Most significantly for present purposes, in January 2017, ClearView acknowledged to ASIC that some calls that it made in respect of particular campaigns were properly characterised as ‘unsolicited’.[29] In April 2017, ASIC told ClearView that it regarded further categories of calls to be ‘unsolicited’.[30] After receiving this indication, ClearView told ASIC that it estimated that over 260,000 customers had received calls in circumstances where ClearView could not verify that it had met the requirements of the anti-hawking provision.[31] Following further investigation, by early May 2017, ClearView estimated that it may have breached the anti-hawking provision up to 303,000 times.[32]

Mr Martin accepted that by February 2017 there were concerns within the ClearView Direct business about breaches of the anti-hawking provisions, and about the way that those breaches were being escalated and responded to within the organisation:[33] the breaches were not being treated as material matters that required escalation and consideration.[34]

1.2.3ASIC engagement pressure selling

In March 2017, ASIC raised additional concerns with ClearView about pressure selling and misselling conduct.[35] After reviewing the transcripts of 42 sales calls from the second half of 2015, ASIC formed the view that ClearView’s sales practices may be unfair or manipulative, and may pressure consumers to purchase a policy.[36] Mr Martin accepted that these calls involved highly problematic sales practices,[37] and that some involved misleading or deceptive conduct and unconscionable conduct.[38]

The problematic sales practices identified by ASIC and Mr Martin included, but were not limited to:

  • First, misrepresentations about what customers were committing to purchase. ASIC was concerned that ClearView sales agents used language that made it unclear that customers were committing to purchase a policy.[39]
  • Second, misrepresentations or omissions about payment arrangements, including not explaining to customers precisely when their first premium would be due,[40] and failing to quote prices aligned with the frequency with which premiums would be deducted, so as to underemphasise the extent of the customer’s financial liability.[41]
  • Third, other forms of misrepresentation, including that a customer’s premiums would never go up with age, despite ClearView retaining the right to unilaterally vary premiums,[42] and about the terms or application of the policies.[43]
  • Fourth, sales agents continued to attempt to sell policies, despite a customer indicating that they wished to read over ClearView’s documentation or consult with a partner or friend.[44] Mr Martin accepted that this was done because ClearView Direct did not want to give people time to reflect upon their purchase,[45] because they might then decide that they did not want or need the product.[46]
  • Fifth, and in a similar vein, sales agents collected customers’ personal information, including bank details, before the customer had confirmed their agreement to proceed with the purchase.[47]

Mr Martin accepted that the issues identified in the 42 calls were representative of what he termedalmost endemiccompliance issues within ClearView Direct for a number of years.[48] ClearView struggled with such systemic issues in 2016 and in 2017 during the period of its engagement with ASIC.[49] As at February 2017, one quarter of all monitored calls by ClearView sales agents involved a breach of ClearView’s quality assurance requirements.[50] Mr Martin agreed that this was completely unacceptable.[51]

Mr Martin accepted that there were at least three causes of these systemic compliance issues:

  • The first was ClearView’s remuneration structure.[52] Mr Martin accepted that ClearView’s commission structure was a contributor to inappropriate behaviour,[53] as it incentivised aggressive sales tactics with the aim of making as many sales as possible at whatever cost.[54]
  • The second was a culture within ClearView Direct that tolerated aggressive sales tactics at the cost of compliance.[55] This was apparent in ClearView’s training practices. Sales agents were trained to engage in unfair sales practices,[56] including through aggressive objection handling approaches.[57] The overarching approach wassell at all costs, which Mr Martin accepted was reflective of ClearView Direct’s broader culture.[58] The prioritisation of sales over compliance was also evident in communications relating to at least one proposed incentives program, which the Head of Direct Sales considered was necessary to stimulate the team and revive thecultural pulse,[59] and which he proposed badging as atraining [and] educational tripin order to circumvent the conflicted remuneration provisions in the Corporations Act.[60]
  • The third was that there were large deficiencies in ClearView Direct’s quality assurance and compliance program.[61] As just one example, only 10 of the 42 calls provided to ASIC had been previously reviewed by ClearView’s Quality Assurance team, and only a small number of those had failed that process.[62] Mr Martin accepted that when the legal team had subsequently reviewed those calls, they had taken a different view as to the number of calls that involved problematic behaviour.[63] More broadly, Mr Martin accepted that there was insufficient division between ClearView’s sales team and its quality assurance function,[64] and that there was a lack of specific legal and compliance experience, particularly in the Direct business.[65]

1.2.4Resolution and closure of the Direct business

ClearView and ASIC negotiated to resolve ASIC’s investigation into the anti-hawking and misselling issues.[66] Those terms required ClearView to undertake a remediation program in respect of over 32,000 policies sold by ClearView between 2014 and mid2017.[67] Excluding 6,000 policies that were cancelled from inception, ClearView anticipated providing a full or partial refund of premiums, bank fees and interest to approximately 8,200 customers, and aReview Offerto approximately 16,000 customers.[68] If customers opt into theReview Offer, ClearView is to review the call in which the customer was sold their policy, and assess whether a refund of premiums or an adjustment of policy terms is appropriate.[69] ClearView also agreed to inform ASIC if it decided to recommence selling through the Direct channel.[70] Mr Martin said that ClearView had no present intention of doing so.[71] Indeed, he went so far as to say that it was difficult to understand how an insurer could sell life insurance in outbound sales calls in a way that was both financially viable and legally compliant.[72]

Mr Martin told the Commission that ASIC had not indicated whether it would take any further action in respect of ClearView’s many breaches of the anti-hawking provisions, or what may have been unconscionable conduct or misleading or deceptive conduct engaged in by its sales agents.[73]


[1]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 2 [12].

[2]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 34 [24].

[3]Transcript, Gregory Martin, 10 September 2018, 53089.

[4]Transcript, Gregory Martin, 10 September 2018, 5309.

[5]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 4 [25].

[6]Transcript, Gregory Martin, 10 September 2018, 531920.

[7]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 4 [28]–[29].

[8]Transcript, Gregory Martin, 10 September 2018, 5311.

[9]Transcript, Gregory Martin, 10 September 2018, 531417.

[10]Transcript, Gregory Martin, 10 September 2018, 5318.

[11]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 4 [27].

[12]Transcript, Gregory Martin, 10 September 2018, 53201; Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 4 [28].

[13]Transcript, Gregory Martin, 10 September 2018, 5320.

[14]Transcript, Gregory Martin, 10 September 2018, 5322–4.

[15]Transcript, Gregory Martin, 10 September 2018, 5325.

[16]Transcript, Gregory Martin, 10 September 2018, 5322.

[17]Transcript, Gregory Martin, 10 September 2018, 53212.

[18]Transcript, Gregory Martin, 10 September 2018, 5322.

[19]Transcript, Gregory Martin, 10 September 2018, 5322.

[20]Transcript, Gregory Martin, 10 September 2018, 53256.

[21]Transcript, Gregory Martin, 10 September 2018, 5326.

[22]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 63 [362]; Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, Exhibit GCM-51 [CVW.6000.0001.0843].

[23]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 63 [362]; Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, Exhibit GCM-51 [CVW.6000.0001.0843].

[24]Transcript, Gregory Martin, 10 September 2018, 5335.

[25]Transcript, Gregory Martin, 10 September 2018, 5335–6.

[26]Transcript, Gregory Martin, 10 September 2018, 5336.

[27]Transcript, Gregory Martin, 10 September 2018, 5336.

[28]Transcript, Gregory Martin, 10 September 2018, 5337–42.

[29]Transcript, Gregory Martin, 10 September 2018, 5337–8.

[30]Transcript, Gregory Martin, 10 September 2018, 5340.

[31]Transcript, Gregory Martin, 10 September 2018, 5341.

[32]Transcript, Gregory Martin, 10 September 2018, 5343; cf ClearView, Module 6 Case Study Submission, 4 [11].

[33]Transcript, Gregory Martin, 10 September 2018, 5345.

[34]Transcript, Gregory Martin, 10 September 2018, 5345.

[35]Transcript, Gregory Martin, 10 September 2018, 5346.

[36]Transcript, Gregory Martin, 10 September 2018, 5346.

[37]Transcript, Gregory Martin, 10 September 2018, 5349.

[38]Transcript, Gregory Martin, 10 September 2018, 5354.

[39]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, Exhibit GCM-53 [CVW.6000.0001.0848 at .0852]; Transcript, Gregory Martin, 10 September 2018, 5346.

[40]Transcript, Gregory Martin, 10 September 2018, 5348.

[41]Transcript, Gregory Martin, 10 September 2018, 5348.

[42]Transcript, Gregory Martin, 10 September 2018, 53489.

[43]Transcript, Gregory Martin, 10 September 2018, 5349.

[44]Transcript, Gregory Martin, 10 September 2018, 5349.

[45]Transcript, Gregory Martin, 11 September 2018, 5387.

[46]Transcript, Gregory Martin, 11 September 2018, 5387.

[47]Transcript, Gregory Martin, 10 September 2018, 5349.

[48]Transcript, Gregory Martin, 10 September 2018, 5358.

[49]Transcript, Gregory Martin, 10 September 2018, 5358.

[50]Transcript, Gregory Martin, 10 September 2018, 5357; Exhibit 6.46, February 2017, Risk and Compliance Committee February 2017 Results, 3.

[51]Transcript, Gregory Martin, 10 September 2018, 5357.

[52]Transcript, Gregory Martin, 10 September 2018, 5358.

[53]Transcript, Gregory Martin, 10 September 2018, 5359.

[54]Transcript, Gregory Martin, 10 September 2018, 5359.

[55]Transcript, Gregory Martin, 10 September 2018, 5358–9.

[56]Transcript, Gregory Martin, 10 September 2018, 5373.

[57]Transcript, Gregory Martin, 10 September 2018, 5373.

[58]Transcript, Gregory Martin, 11 September 2018, 5387.

[59]Transcript, Gregory Martin, 11 September 2018, 5388.

[60]Transcript, Gregory Martin, 11 September 2018, 5388–90.

[61]Transcript, Gregory Martin, 10 September 2018, 5358.

[62]Transcript, Gregory Martin, 10 September 2018, 5349–50.

[63]Transcript, Gregory Martin, 10 September 2018, 5353.

[64]Transcript, Gregory Martin, 11 September 2018, 5393–4.

[65]Transcript, Gregory Martin, 11 September 2018, 5396.

[66]Transcript, Gregory Martin, 11 September 2018, 5398.

[67]Transcript, Gregory Martin, 11 September 2018, 53989.

[68]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 63 [358]; see also Transcript, Gregory Martin, 11 September 2018, 54001; cf ClearView, Module 6 Case Study Submission, 8–9 [29].

[69]Exhibit 6.28, Witness statement of Gregory Martin, 21 August 2018, 62 [351(c)]; see also Transcript, Gregory Martin, 11 September 2018, 54001; cf ClearView, Module 6 Case Study Submission, 8 [29].

[70]Transcript, Gregory Martin, 11 September 2018, 5402.

[71]Transcript, Gregory Martin, 11 September 2018, 5402.

[72]Transcript, Gregory Martin, 11 September 2018, 5402.

[73]Transcript, Gregory Martin, 11 September 2018, 54023.