A disgraced insurer has been slapped with a $1.2 million fine for misrepresenting its junk funeral policies to Indigenous people.
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The Aboriginal Community Benefit Fund (ACBF), owned by collapsed insurance company Youpla, was handed the penalty by the Federal Court on Tuesday.
The court found ACBF told plan holders they would receive a lump sum payment of their chosen benefit amount, when in fact they would only be reimbursed for expenses they could prove had been incurred.
Sarah Court, deputy chair of the Australian Securities and Investments Commission, said the regulator took the case to court because it believed the business was causing harm to Aboriginal people.
"Taking regulatory action where misconduct is targeted at Aboriginal and Torres Strait Islander peoples is a priority that we are committed to, and we will continue to work with stakeholders to achieve appropriate outcomes," she said in a statement.
But Justice Scott Goodman disagreed with ASIC's contention that ACBF falsely represented that is was Aboriginal-owned, that the plan had Aboriginal community approval or that it was more beneficial to Aboriginal consumers than other insurance plans available at the time.
The court also did not accept that Youpla was involved in the contravention by ACBF.
The finding is the latest in a string of regulatory matters taken against the insurer and its subsidiaries.
ASIC on Thursday launched Federal Court proceedings against Youpla for maintaining insurance arrangements that benefited the directors of a separate company and were not in the interests of Youpla members, who were vulnerable to unaffordable premium increases.
Youpla sold its dodgy insurance policies to Indigenous people across Australia for decades before coming to the attention of the 2018 banking royal commission and regulators.
The company collapsed in March last year, with more than 10,000 families losing out on their funeral plans.
In response, the federal government announced it would provide grants to grieving families that missed out on funeral benefits as a result of the collapse.
ASIC says it is carefully reviewing the judgment, in light of the mixed findings in its favour.
13YARN 13 92 76
Aboriginal Counselling Services 0410 539 905
Australian Associated Press
