Computershare expects an update on the potential sale of ASIC's registry at next week's federal budget.

Computershare expects an update on the potential sale of ASIC's registry at next week's federal budget. Photo: Jim Rice


A big insurance firm has sacked an allegedly corrupt agent just days after he was honoured as the company's top Australian broker.

Fairfax Media can also reveal that NSW detectives have now joined investigators from corporate watchdog the Australian Securities and Investments Commission in investigating former staff at the company, Combined Insurance, amid allegations that some used fake mobile phones to steal people's identities and maximise commission payments.

Last month, Fairfax Media reported that agents operating in a hot-house sales environment had sold insurance policies to pensioners and the disabled in a way that might breach Australian law.

Several customers alleged blatant fraudulent practices by agents working for Combined, and a company insider has estimated that at least 10 per cent, and as much as 60 per cent, of the company's estimated 70,000 policyholders might have been misled, sold incomplete or ineffective accident, sickness and disability policies.

Fairfax Media can now reveal that the company sacked four brokers, and is expected to discipline or sack others, after the revelations.

 A former agent now being probed by NSW police, Neil Williams, was given a positive reference by Combined Insurance and was not reported to ASIC, even though he had resigned from the firm after he engaged in allegedly criminal conduct. 

Police are investigating Mr Williams over allegations he stole people's identities, including those of a minor, to generate false sales and earn commissions, before he left Combined Insurance in 2012.

The firm's failure to report Mr Williams to ASIC, or alert his future employers about his conduct, has allowed Mr Williams to remain in the financial services industry. He has been employed by several other firms, including his current employer, Parra Financial, in NSW.

When quizzed about his practices at Combined Insurance, Mr Williams said: "I'd rather not talk about that."

The revelations underline a major debate in the financial services and insurance industry about whether it needs a national register of brokers and agents who have been sacked for serious misconduct.

Meanwhile, Combined Insurance's decision to award insurance broker Robert Docherty with one of the firm's top honours at a Queensland convention last month has raised serious questions about the company's culture.

When he was given the award at a ceremony at a five-star Gold Coast hotel, Mr Docherty was under internal investigation for using false identities to sell insurance products to maximise his commission payments. 

His dismissal this week, along with that of several other insurance brokers, came after Fairfax Media confronted the company with information about their suspected misconduct.

Combined Insurance is a subsidiary of US financial-services behemoth ACE and has around 65,000 Australian policyholders who have purchased accident, sickness or other insurance products.

The commissions selling model used by Combined and other financial services firms is being examined by ASIC and the federal government, which is moving to reform the insurance industry amid concerns that Australians are being sold dodgy policies by commission-hungry agents.

The worst cases uncovered by whistleblowers and internal company documents involve allegations that agents falsified or omitted information about policyholders' medical conditions, income, occupation, date of birth or welfare status to obtain sales and maximise the agents' commissions. These practices mean some policyholders have bought insurance that is potentially worthless.

Combined Insurance has been the subject of several investigations across the globe. In 2011, the Central Bank of Ireland issued the firm the largest fine in the bank's history – €3.35 million – for failing to operate fairly and ensure adequate governance. The UK Financial Services Authority also fined the firm £2.8 million.

At the time, Ireland's central bank issued a statement saying it has issued the record fine because of the "the seriousness with which we view fundamental regulatory failures".

Assistant Treasurer Josh Frydenberg said recently that the "serious allegations" involving Combined Insurance highlighted why the government wanted to introduce "reforms to lift professional and ethical standards in the financial services industry".

In a statement, Combined Insurance's Asia Pacific manager, Chris Carey, said that the firm was "troubled and concerned to learn when any member of our sales force does not act appropriately".

"Any cases of potential fraud or misconduct are thoroughly investigated by Combined and appropriate action is taken as soon as an investigation concludes.

"This may include termination, submission of breach notices to ASIC or lodgement of reports to the police."

Mr Docherty could not be contacted for comment.