Australia’s ANZ Bank will hold an independent review of OnePath, its insurance and superannuation arm. This follows the scrutiny by the Australian Securities and Investments Commission (ASIC), for reported breaches. The errors occurred between early 2013 and mid-2015 and affected more than one million customers, totalling $53.5 million in costs.
OnePath’s breaches were noticed in the life, general insurance, superannuation and funds management wings, noted ASIC, reports The West Australian.
It said the bank also bungled in superannuation payments with amounts being credited to wrong accounts. The proposed review of ANZ will be undertaken by PricewaterhouseCoopers.
OnePath has already paid $4.5 million as compensation to affected customers. The ASIC further assured that it will keep a tab on the rectification of all the breaches.
The directive for review comes at a time when the Australian financial services sector has been facing a series of scandals including misconduct at CommInsure, the insurance arm of Commonwealth Bank.
According to a report in Money Management, ASIC identified the following breaches in OnePath.
- Failure in disclosing documentation for some insurance products.
- Inadequate systems or processes to ensure compliance.
- Processes failed to ensure steps to contact customers and statutory timeframes not met.
- Processes with manual steps not followed up.
- Insufficient supervision in outsourced functions including call centres.
- Processing errors with payments made to incorrect superannuation accounts
- Time lag in identifying some breaches.
Regarding funds credited to wrong accounts, ASIC said, “ANZ has now returned these funds to the correct accounts and provided over $400,000 compensation for lost earnings and/or incorrect fees.”
ASIC deputy chair Peter Kell cautioned banks that compliance systems have to be effective for adherence to the licence obligations prescribed in Australian financial services.
In an apology to customers, ANZ Wealth Australia managing director Alexis George noted that majority of the compliance breaches happened in the past.
“We know we can do better. We agreed with ASIC last year that an independent review of our systems will be undertaken to further strengthen our compliance systems,” she said.