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Determination
Case number | 998790 |
Financial firm | Resolution Life Australasia Limited |
Case number: 998790 9 May 2024
This complaint is about premium increases on the complainant’s insurance policies. She says the insurer did not properly bring the increases to her attention. She says the insurer should refund the increases.
The insurer says it brought the increases to the complainant’s attention by email.
The policy was originally sold by a different insurer under a different name and brand, and then taken over by the current insurer. The complainant also says she never authorised the current insurer to take premiums by direct debit, and wants all premiums taken by the current insurer refunded for that reason.
No. The insurer has not established that it ever emailed or mailed the annual notices from 2022 to the complainant. It must refund the increases from then on.
Yes. The policy was initially sold by Insurer A. In 2017, Insurer B took the policy over in a process approved by the Federal Court, although the name of the insurer and the brand on the policy documents did not change. The complainant does not complain about Insurer B deducting premiums. Insurer B was sold in 2020, and renamed. The company most recently taking direct debits is the same, it has just been renamed. The renaming of the insurer does not mean that the authorisation to take premiums was revoked or altered.
Fairness requires the reasonable expectations of the parties to be met. The complainant reasonably expected the insurer to give her notice of premium increases. It would not be fair for the insurer to charge increased premiums where it cannot establish it gave notice of the increases.
This determination is partly in favour of the complainant. The insurer should not have collected increased premiums from the date of the 2022 notice onwards. It must refund the increases to the complainant. It must also pay interest, calculated in accordance with the Insurance Contracts Act, and provide a copy of its calculations to the complainant.
No. The insurer has not established that it ever emailed or mailed the annual notices from 2022 to the complainant. It must refund the increases from then on.
The premiums increased every year because the premiums were stepped (which means they increase with age) and because the policy had automatic CPI increases to the sum insured.
The insurer has produced annual notices which show the increases to the sum insured and the premium. The notices say that the complainant could contact the insurer to refuse the CPI increases if she wanted to.
Those notices, if properly provided to the complainant, are sufficient to put the complainant on notice of the premium increases. The question in this case is whether they were properly provided to the complainant.
The complainant says the insurer did not send her the notices for the 2022 and 2023 years.
The insurer says it emailed the notices to the complainant. It has not produced copies of the emails, or even an example of the standard email it sends. The complainant denies receiving the notices by email.
I am not satisfied the insurer sent the notices by email.
The notices have the complainant’s postal address at the top of them but that does not mean they were posted. The insurer, in its submissions, does not say they were posted. It says they were emailed. I am not satisfied the notices were posted.
It is possible that the notices were posted by the insurer on an online portal, and that the insurer then sent an email to the complainant inviting her to look at the notices on the portal. The complainant says she never accessed the insurer’s online portal. She never opted in to receiving notices via the portal. The complainant has shown that until 2021 she was receiving these notices in hard copy by post. She says she expected to continue to get them by post.
The insurer had no reason to think that the complainant was using or would use the portal. If the notices were posted on an online portal, I am not satisfied that was sufficient for the insurer to give notice to the complainant. I note that this finding is consistent with the finding in AFCA determinations 881852 and 761068.
The policy document says:
In addition to these documents, we will send to you a notice at least once a year setting out your premium and charges.
The Life Insurance Code of Practice also requires an annual notice to be given. For the reasons set out above, I am not satisfied the 2022 or 2023 annual notices were given. It is inconsistent with the policy terms, unfair, and inconsistent with good industry practice for an insurer to increase premiums without telling the customer. Accordingly, the insurer should not have collected increased premiums from the date of the 2022 notice onwards. It must refund the increases to the complainant. It must also pay interest, calculated in accordance with the Insurance Contracts Act, and provide a copy of its calculations to the complainant.
Yes. The policy was initially sold by Insurer A. In around 2013, the branding on the policy schedules changed to a different name, although Insurer A was still the insurer. In 2016 Insurer B took the policy over in a process supervised by the Federal Court, although the name of the insurer on the policy documents did not change. The complainant does not complain about Insurer B deducting premiums. Insurer B was sold in 2020, and renamed. The company receiving direct debits is the same, it has just been renamed. The renaming of the insurer does not mean that the authorisation to take premiums was revoked or altered.
Fairness requires the reasonable expectations of the parties to be met. The complainant reasonably expected the insurer to give her notice of premium increases.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. I have reviewed and considered all of the information the parties have provided.
While the parties have raised a number of issues in their submissions, I have restricted this determination to the issues that are relevant to the outcome.
