By Paulina Duran
SYDNEY (Reuters) - Commonwealth Bank of Australia's (AX:CBA) life insurance arm has been charged with 87 counts of unlawfully offering to sell products via unsolicited telephone calls - the first criminal prosecution against a major bank following a sector-wide misconduct inquiry.
The Australian Securities and Investments Commission (ASIC)has accused Colonial Mutual Life Insurance Society Ltd, known as CommInsure, of unlawfully selling life insurance policies via unsolicited phone calls between October and December 2014.
CBA could be fined as much as A$21,250 for each charge or up to A$1.8 million, the regulator said in a statement, adding that matter was being prosecuted by the Commonwealth Director of Public Prosecutions.
CBA agreed to sell its life-insurance business to Hong-Kong based AIA Group (HK:1299) in September 2017 but the deal has yet to be completed due to a prolonged regulatory approval process.
CBA said in a statement it was considering the matter and did not plan to comment further at this time.
CommInsure was also criticized at the inquiry into financial sector misconduct last year after it was shown to have rejected a payout to a heart attack victim because it was using outdated assessment criteria.