ANZ to Pay $219,000 To Deceased Woman’s Estate for Loss of life insurance, Says AFCA

Complaint

On 18 November 2021, AFCA found that the Australia and New Zealand Banking Group Limited had breached its obligation to ensure it provided its financial services efficiently, honestly and fairly as required by s912A(1)(a) of the Corporations Act. The “liability‟ determination did not address issues related to loss and causation. It had been agreed that a determination addressing liability would be issued first and a supplementary determination issued to deal with loss issues.

The initial determination found that ANZ’s contact with Ms O in 2014 led her to consolidate her superannuation accounts which lead to the lapse of a life insurance policy held in one of the roll-over funds and taking out a new policy with another insurer.  Ms O passed away in August 2016 in tragic

circumstances. A claim made by Ms O’s mother under the new life insurance policy was denied by the insurer on the basis of an undisclosed pre-existing condition.  AFCA held that the bank’s representatives ignored red flags that should have caused them to question whether Ms O understood what they were telling her about the [new fund] Super product and the risk of loss of benefits upon transfer. The bank’s representatives engaged in high-pressure sales tactics even though they should have been aware that Ms O may not comprehend what they were telling her.

This supplementary determination addresses:

• as a preliminary matter – errors made in the “liability‟ determination setting out why those
• errors do not change the panel’s findings on the breach of s912A(1)(a)
• whether a loss has occurred
• whether the breach of s912A(1)(a) was a cause of the loss
• whether AFCA should award compensation for a breach of s912A(1)(a) in circumstances

where there is no private right to compensation for the breach.

References to the complainant in this determination is to the executor of the deceased estate of Ms O, being Ms O’s mother.

Issues and Key Findings

AFCA is satisfied Ms O would have retained her super but for ANZ’s conduct. It is also satisfied the insurance policy would have been current as at 23 August 2016, the policy would have responded to a claim for death benefits and the trustee would have paid the death benefits to Ms O’s estate.

The benefit payout figure would have been about $219,365.12. This is the loss incurred by Ms O’s estate.

It is fair in all the circumstances that AFCA awards compensation to Ms O’s estate for ANZ’s breach of its obligation to provide its financial services efficiently, honestly and Fairly.

Determination

This determination is in favour of the complainant.

The complainant has 30 days to accept the determination and the supplementary determination. If accepted, the financial firm has 28 days to pay $219,365.12 to the complainant in her capacity as the executor of Ms O’s estate with interest.

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