Insurer urges probe into policy twisting by 60 sales defectors

National Mutual, the territory's only listed life insurance company, is pushing for an investigation into the alleged 'twisting' of about 2,000 life policies with annualised premiums totalling about $12 million.

The company is alleging that about 60 of its former sales staff who defected to Top Glory and Canadian Eastern Life Assurance (CEF Life) are responsible for the sales.

It is calling for a top level probe which could result in the reprimand or deregulation for three years of any sales staff involved. But Top Glory and CEF Life have denied the allegations and claim they will fight any moves by National Mutual to have the sales revoked or sales staff punished.

Twisting occurs when an insurance sales person makes misleading statements, inaccurate comparisons or fails to disclose details to induce an individual to replace his life insurance with another company before it has been surrendered, lapsed or paid up.

The incentive for the sales person are the high up-front commission payments which are normally deducted for a policy's early premium payments.

National Mutual is alleging that its computer systems have revealed that former sales staff could have twisted about 2,000 policies during the first six months of the year.

Top Glory sales staff are alleged to be responsible for about 45 per cent of the irregular sales, with CEF Life accounting for the rest.