Shine Lawyers has launched a class action on behalf of hundreds of thousands of Australians who were slugged with excessive insurance premiums.
The firm alleges the Commonwealth Bank’s superannuation provider Colonial First State Investments Limited tipped its members into overpriced policies with the bank’s insurance arm CommInsure.
Class Actions Practice Leader Rebecca Jancauskas said this was not in their best interests as substantially similar or better policies with cheaper premiums were available through other providers.
“These customers were forced to pay more for life insurance as well as total and permanent disability insurance, and this has eaten into their superannuation,” she said.
“Many of these people are approaching retirement and now their nest egg has shrunk as a result of the conduct of Colonial First State Investments Limited.”
As subsidiaries of the Commonwealth Bank, Ms Jancauskas said Colonial First State Investments Limited and CommInsure were motivated by self-interest.
“This appears to have been a mutually beneficial arrangement that had the effect of putting profits ahead of people.”
Ms Jancauskas said the group life insurance industry had been put on notice by the Financial Services Royal Commission, which has called for more oversight of the market.
“Commissioner Hayne has said vertically integrated companies that include both super funds and insurers will need to justify decisions to default members into their own life policies.”
Charlie Morris, Chief Investment Officer for Woodsford Litigation Funding, which is funding the action, said a class action was the best way to deliver justice for those overcharged for insurance.
“Many customers may have lost a few thousand dollars, which would not ordinarily be enough to warrant launching individual court actions,” Mr Morris said.
“Class actions like this one, backed by litigation funding, ensure that justice is accessible and affordable to everyone, and Woodsford is pleased to play its part in helping these individuals to achieve the redress they deserve.”
The class action, filed in the Federal Court in Victoria this week, is open to members of the following superannuation funds:
- FirstChoice Personal Super and Pension
- FirstChoice Wholesale Personal Super and Pension
- FirstChoice Employer Super
- Commonwealth Essential Super
Additionally, members of the above funds must have held life and/or total and permanent disability insurance with CommInsure between January 2014 and January 2020.
Media & Communications Team Leader | Miriam Sawan I 0436 666 575 [email protected]