The Federal Court has ordered MLC Life Insurance pay a $10 million penalty for failing to pay promised benefits, resulting from a lack of appropriate systems to administer its insurance policies.
In addition to the $10 million penalty, MLC has provided approximately $11.8 million in remediation to approximately 1,000 impacted customers.
The court made declarations that MLC Life had contravened the ASIC Act, the Corporations Act and the Insurance Contracts Act for failures to:
- Pay a rehabilitation benefit to 119 customers who had undertaken approved rehabilitation programs following injury and/or disability;
- Have adequate processes to review and, if appropriate, promptly update its medical definitions for critical illnesses in certain policies; and
- Adequately train and monitor staff about communications to customers regarding the administration of their policy, including policy schedules and premium notices.
MLC Life has also been ordered to publish an adverse publicity notice on its website.
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