By Paulina Duran
SYDNEY (Reuters) - An inquiry into Australia's financial sector heard on Monday examples of possible misconduct by insurance companies, including spying on policyholders, overcharging customers and misleading sales calls.
The Royal Commission opened two weeks of hearings into the insurance industry on Monday after earlier this year exposing cases of misconduct in the consumer credit, financial planning, and small business lending sectors.
The inquiry has the power to recommend prosecutions and instigate sweeping reforms of the financial system, threatening to upend business practices at some of the country's biggest financial institutions.
The inquiry will examine 10 case studies over the coming days, including incidents of overcharging customers, poor product disclosure and inadequate handling of insurance claims, said Rowena Orr, a lawyer assisting the inquiry.
In her remarks to the inquiry, Orr disclosed several admissions of possible misconduct that were included in submissions sent by 16 domestic and foreign insurance companies.
TAL, the Australian unit of Japanese insurance giant Dai-ichi Life Holdings <8750.T>, said in a submission that it had made hundreds of misleading sales calls, Orr said.
"From 2012 to 2017, TAL identified that approximately 3.5 percent of its monitored calls were misleading sales calls according to its internal criteria," she told the inquiry.
These included calls to vulnerable people with limited literacy, or poor communication and comprehension skills, the inquiry heard.
American insurer Metlife Inc
Hong Kong-based AIA Group <1299.HK> said it had overcharged customers on their premiums, while the Swiss giant Zurich Insurance Group
Insurance Australia Group
She said reports of misconduct were also received from the insurance units of Commonwealth Bank
Before the public hearings, companies are asked to identify in their submissions any misconduct they had engaged in, or any conduct that fell below community standards and expectations since 2008.
(Reporting by Paulina Duran; Editing by Jonathan Barrett and Darren Schuettler)