The association had received complaints that bank officers were approaching customers within bank premises to promote investment-linked insurance as a 'better investment option offering higher returns than savings or fixed deposits. In most cases, customers were not informed that they were being sold investment-linked insurance, which requires the payment of premiums over a specified number of years.
In one instance, he said, a woman claimed she had clearly informed the bank officer that she did not wish to purchase any insurance, as she was nearing retirement and had limited savings.
Along with those documented by the Ombudsman for Financial Services (OFS, now known as the Financial Markets Ombudsman Service, FMOS), such mis-selling is likely just the tip of the iceberg. Some cases were illogical, with insurance policies sold to elderly individuals who clearly lacked the financial means to continue paying the premiums. In these instances, customers were told to sign up for auto-debit facilities with the bank, and the policy duration would likely outlast the policyholder's lifetime.
CAP is of the view that if a bank wishes to act as an agent for an insurance company, it should operate from a separate premise — not within the bank itself. Conducting such promotions inside the bank gives customers the misleading impression that the bank is offering a savings product.
