ASIC appeals part of Aboriginal funeral insurance judgement
ASIC appeals part of Aboriginal funeral insurance judgement | Insurance Business Australia
Insurance News
ASIC appeals part of Aboriginal funeral insurance judgement
Consumers deceived into buying the cover, alleges regulator
Insurance News
By
Daniel Wood
The Australian Securities and Investments Commission (ASIC) has appealed part of the Federal Court’s judgement in its case against ACBF Funeral Plans (ACBF) and its parent entity Youpla Group.
An ASIC media release said this appeal concerns its allegation that ACBF “represented it was owned or managed by Aboriginal persons when that was not the case.” The Court, in its decision, “was not satisfied those representations were false,” said the release.
“ASIC has appealed this decision because we are concerned that representations were made to First Nations people that ACBF and its funeral plan had Aboriginal ownership and management which, in ASIC’s view, had the effect of deceiving many Aboriginal consumers into buying the plan,” said Sarah Court (pictured above), ASIC’s deputy chair.
September’s judgement
In September, the Court ordered a $1.2 million penalty against ACBF, a company that sold funeral expenses insurance to Aboriginal people. According to an ASIC release, the firm misrepresented the sale and promotion of the insurance.
The Court found that ACBF, part of the Youpla Group, “represented” to insurance holders that they would receive a lump sum payment of their chosen benefit amount for funeral expenses. However, said the release, the company only reimbursed “for funeral related expenses up to the benefit amount upon production of proof that those expenses had been incurred.”
ASIC’s other allegations were dismissed. Those allegations included that ACBF Funeral Plans was owned or managed by an Aboriginal person or persons and that the ACF Plan had Aboriginal community approval.
Penalty proceedings against ACBF directors
In August this year, ASIC commenced civil penalty proceedings in the Federal Court against five former directors and officers of ACBF Funeral Plans and Youpla Group for breaches of their duties.
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