K: Financial and Insurance Services

Insurance shambles left homes in danger

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Original article by Michael Roddan
The Australian – Page: 17 & 21 : 20-Sep-18

The banking royal commission has heard evidence from customers of budget insurer Youi who had lodged insurance claims for storm damage to their homes. Amongst other things, the inquiry was told that Youi has yet to authorise repairs to a home in Queensland that was damaged by Cyclone Debbie in March 2017. Jason Storey, the chief operating officer of claims handling at Youi, conceded that the insurer lacks sufficient resources to cope with major natural disasters.

CORPORATES
YOUI PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RAND MERCHANT INSURANCE HOLDINGS GROUP LIMITED, NEW SOUTH WALES. ENVIRONMENT PROTECTION AUTHORITY

Westpac slashes new borrower rates

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Original article by Duncan Hughes
The Australian Financial Review – Page: 21 : 20-Sep-18

Westpac will increase its standard variable mortgage interest rates for existing customers by 14 basis points on 20 September, with several of its major rivals to lift their rates in coming weeks. However, Westpac will also target new home loan customers, offering rate cuts of up to 110 basis points for the first five years. Customers will then be offered a discount of 80 basis points for the life of their loan. National Australia Bank has yet to announce any changes to its interest rates for existing customers.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF MELBOURNE LIMITED, ST GEORGE BANK LIMITED, BANK OF SOUTH AUSTRALIA LIMITED

Cost of home loan less than 2017: RBA

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Original article by James Glynn
The Australian – Page: 22 : 19-Sep-18

A number of Australian lender have increased their mortgage interest rates since the Reserve Bank’s last board meeting on 4 September. However, the minutes of the meeting note that the cost of financing a home loan remains lower than at the same time in 2017. The Reserve Bank also observed that bank funding costs are still low by historical standards. In addition, the Reserve Bank gave indications that the next movement in the cash rate is likely to be upward, although this is not expected in the near-term.

CORPORATES
RESERVE BANK OF AUSTRALIA

Hagger NAB exit opens way for Baird

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Original article by James Eyers
The Australian Financial Review – Page: 1 & 18 : 18-Sep-18

National Australia Bank has appointed former New South Wales premier Mike Baird as chief customer officer of consumer banking, after Andrew Hagger resigned as the head of consumer banking and wealth. Hagger said he will accept responsibility for the fee-for-no-service scandal that was exposed by the banking royal commission, and fund managers say his position had become untenable following the revelations. Baird, who is currently NAB’s head of corporate and institutional banking, is now regarded as a leading contender to eventually succeed CEO Andrew Thorburn.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WILSON ASSET MANAGEMENT, ALPHINITY CONCENTRATED AUSTRALIAN SHARE FUND, PERPETUAL LIMITED – ASX PPT, AMP LIMITED – ASX AMP, AUSTRALIAN GREENS, WESTPAC BANKING CORPORATION – ASX WBC, BANK OF NEW ZEALAND, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLAYTON UTZ

AMP still taking fees from the dead

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 3 : 18-Sep-18

Paul Sainsbury, the head of wealth management at AMP, appeared before the banking royal commission on 17 September. He told the inquiry that AMP had been charging life insurance customers a fee even after being informed that they had died. Sainsbury said the practice had been occurring since 2016, and the extent of the problem had been discovered after the royal commission was told earlier in 2018 that the Commonwealth Bank had engaged in similar practices.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, DOVER FINANCIAL ADVISERS PTY LTD, ALLIANZ AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BORAL LIMITED – ASX BLD, COCA-COLA AMATIL LIMITED – ASX CCL

Hayne to leave banks with billion-dollar bill

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Original article by Angus Grigg, James Eyers, Edmund Tadros
The Australian Financial Review – Page: 1 & 8 : 17-Sep-18

Australia’s major banks face years of litigation and costly settlements as a result of the banking royal commission. Law firm Maurice Blackburn has already flagged plans for legal action over a number of issues, including the calculation of household expenses prior to loans being approved. Omkar Joshi of Regal Funds Management says he is reminded of the UK’s payment-protection insurance scandal, which ended up costing UK banks Stg40 billion. Hugh Giddy of Investors Mutual says it is hard to deny that banks have made loans to some people who were not in a position to borrow money.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, MAURICE BLACKBURN PTY LTD, REGAL FUNDS MANAGEMENT PTY LTD, INVESTORS MUTUAL LIMITED, AMP LIMITED – ASX AMP, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, LLOYDS BANK PLC, OLIVER WYMAN GROUP, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, SLATER AND GORDON LIMITED – ASX SGH, CORELOGIC AUSTRALIA PTY LTD

Insurer bullied nurse to stop claim

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Original article by Elizabeth Redman,{SHARE}Michael Roddan
The Australian – Page: 2 : 14-Sep-18

The financial services royal commission heard evidence on 13 September that TAL paid a private investigator $20,000 to follow a person after it had reluctantly paid out her claim on a mental health policy. The commission heard that TAL, which has around 18 per cent of the life insurance market, had to be taken before the Financial Ombudsman Service before it would agree to pay the claim. The commission also heard evidence that Comminsure rejected a claim from a breast cancer sufferer because her operation was not deemed "radical" enough, despite there being no definition of "radical breast surgery" in its policy documents.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY,{SHARE}TAL LIMITED,{SHARE}COMMINSURE,{SHARE}FINANCIAL OMBUDSMAN SERVICE LIMITED

Sack them all, says insurance boss

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Original article by Michael Roddan, Elizabeth Redman
The Australian – Page: 2 : 11-Sep-18

The banking royal commission commenced its investigation into the life insurance sector on 10 September. Senior counsel assisting the commission, Rowena Orr QC noted the industry had paid $6 billion worth of commissions to financial planners over the five years to 2017, suggesting this was a key factor behind the sector’s unethical behaviour. ClearView chief risk officer Greg Martin admitted to the commission that it had breached anti-hawking laws more than 300,000 times, and that it had a "full on sales" culture.

CORPORATES
AUSTRALIA. JOINT COMMITTEE OF PUBLIC ACCOUNTS AND AUDIT, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLEARVIEW WEALTH LIMITED – ASX CVW

ASIC accuses NAB of $100m super rip-off

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Original article by Ben Butler, Michael Roddan
The Australian – Page: Online : 7-Sep-18

The Australian Securities & Investments Commission has launched legal action against National Australia Bank over the fee-for-no-service scandal. ASIC claimed in a suit filed with the Federal Court on 6 September that NAB had breached the law on 77 occasions, and that it had "ripped off" over 500,000 unwitting superannuation fund members to the tune of more than $100 million. ASIC claimed NAB’s actions had undermined confidence in the superannuation system, while NAB faces fines of up to $37.5 million.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, FEDERAL CIRCUIT COURT OF AUSTRALIA

ANZ and CBA hike variable home loans rates

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Original article by Michael Roddan
The Australian – Page: Online : 7-Sep-18

The Commonwealth Bank and the ANZ both announced increases to their variable home loan rates on 6 September. The ANZ will increase its rates by 16 basis points as from 27 September, while the CBA’s 15 basis point increase will take effect from 4 October. Fred Ohlsson, the head of ANZ Australia, said the decision to lift rates was a difficult one, while CBA retail bank boss Angus O’Sullivan said it had lifted its rates after "careful consideration". The announcement by the ANZ and the CBA that they were lifting their rates prompted the Australian dollar to fall from $US0.7202 to $US0.7180.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA