ASIC has issued an interim stop order on the Clearview ClearChoice Income Protection Cover and Accidental Income Protection Cover, relating to two underlying products.
In a media release from ASIC, it said the regulator made the interim stop order in relation to Clearview Life’s Income Protection Cover to protect consumers from acquiring life insurance that may not be consistent with their objectives, financial situation or needs.
ASIC was concerned that the TMD failed to consider the impact of key eligibility criteria (i.e. age and minimum employment criteria) on the suitability of the product for certain classes of consumers. As a result, ASIC was concerned that the target market contained classes of consumers for whom the product was not likely to be appropriate.
The regulator was also concerned that the TMD does not specify any meaningful distribution conditions to ensure that the income protection cover would likely be distributed to consumers in the target market and likely exclude distribution to consumers in the negative target market.
The interim orders prohibit Clearview Life from engaging in retail product distribution and providing general advice in respect of the product for new customers. The orders are valid for 21 days unless revoked earlier.
DDO requires firms to design financial products that meet the needs of consumers, and to distribute those products in a more targeted manner.
A Target Market Determination is a requirement under DDO. It is a mandatory public document that sets out the class of consumers a financial product is likely to be appropriate for (the target market) and matters relevant to the product’s distribution and review.