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Wednesday 20 June 2012

12-135MR Avant to change insurance policy advertising

Avant Insurance Limited (Avant) has changed the advertising for its Avant Practitioner Indemnity Insurance Policy, in response to ASIC concerns the ads were potentially misleading.

Avant’s policy insures medical practitioners against liability arising from healthcare treatment, advice, and services provided to patients.

The ads, which were in the form of a letter sent to policy holders of competing products, included a table comparing the cover provided by Avant’s policy against that of four other competitors. The table showed a tick where cover was provided and a cross where cover was not provided by each policy.

ASIC was concerned the table created the impression that Avant’s policy provided more cover than its competitors in some areas, when this was not necessarily the case. The ticks used in the table gave the impression that Avant provided unqualified cover for the items ticked, whereas some of the cover had limitations. In particular:

  • references to cover for ‘unpaid healthcare activities’ were not qualified to alert the consumer to applicable exclusions; and

  • references to cover for ‘supervised acts’ were not qualified to alert the consumer to the existence of conditions and exclusions for practice staff under supervision.

‘Any comparison of benefits should be accurate and balanced and have a reasonable basis,’ ASIC Commissioner Peter Kell said.

While the letter included a footnote asking consumers to read and consider the policy wording and the product disclosure statement, Mr Kell said qualifications should be clearly stated.

‘Statements referring the customer to a document such as a product disclosure statement will not be sufficient to correct a misleading impression,’ Mr Kell said.

‘Qualifications should be given sufficient prominence to effectively convey the key information.’

Avant has agreed to:

  • make clear to consumers that cover is subject to applicable terms, conditions and exclusions of the policy where key statements are made about policy features;

  • place disclaimers in close proximity to any key statements about the features of the policy;

  • stop the use of comparisons that may not accurately represent the scope of cover provided by Avant and its competitors; and

  • update its internal marketing guidelines to reflect ASIC’s Regulatory Guide 234: Advertising financial products and advice services: Good practice guidance (RG 234) and work with marketing staff to improve disclaimers and warnings.

ASIC acknowledges Avant’s cooperation in responding to this issue.

Last updated: 20/06/2012 12:00