Mis-selling of Banc assurance Product


Ms H has been a customer of ABC Bank for 10 years. Sometime in 2013, Ms H had wanted a savings plan for her children. She was approached by the sales officer of the bank and was offered a bancassurance product. Ms H specifically told the bank officer that she had wanted a savings plan and not an insurance policy. She was assured by the bank officer that the product is a savings plan with good returns if she saved her money under the plan for a period of minimum 3 years. She was also informed by the bank officer that all savings accounts opened with the bank include insurance coverage. With the assurance given by the bank officer, Ms H signed up for the product. For purposes of the savings plan, Ms H deposited money into the savings account monthly for 3 years.

Upon completion of 3 years, Ms H discovered that the “savings plan” which she   had signed up for was in fact a life insurance policy with coverage up to 90 years. She further discovered that  the monthly savings which she had placed in the savings account were used towards payment of the insurance premium.

Ms H avers that she was misled by the bank into purchasing an insurance policy which she did not require. She immediately cancelled the policy and returned all the documents to the bank to process the cancellation. However, the cancellation was not done and the documents could not be located. ABC Bank rejected the claim on the grounds that the sales officer had complied with the sales procedures of the bank.  



Upon reviewing the available evidence furnished by the Ms H and ABC Bank, the Case Manager highlighted  the bank’s inability  to furnish  the following pertinent documents as for scrutiny:


  1. The Application Form that contains information on whether the Complainant was required to disclose whether she has existing insurance policies and whether she still requires a bancassurance product which is an insurance policy;


  1. The Product Disclosure Sheet which provides salient information about the product features and the cooling off period so that customers can appreciate the product sold and make a considered decision on whether to sign up for the product, in compliance with the Bank Negara Guidelines on Product Transparency and Disclosure (BNM/RH/GL 000-3).


  1. The Standing Instruction signed by the Complainant authorizing the bank to deduct the monthly payment  for payment of insurance  premium; and


  1. A checklist of all the documents that was given to customers upon signing up for the product, in accordance to the said Guidelines.


The Case Manager was of the view that in the absence of the above documents, it cannot be ascertained if the Complainant had been properly informed of the features and the terms of the product.



ABC Bank  accepted the Case Manager’s findings and  resolved the matter amicably with Ms H.