The damning allegations first aired at the banking royal commission led to the court penalty, and $5.2m being repaid to 10,000 customers.
ASIC sued AMP in May 2021 alleging the company did not stop charging the fees even when it had been notified of the customers’ deaths.
On Friday, the Federal Court ordered that AMP Life and AMP Financial Planning be issued a total penalty of $24m, the company said in a statement to the exchange.
“AMP apologises to all beneficiaries of those affected by this matter,” group general counsel David Cullen said in the statement.
“We have made strong progress in becoming a customer-focused and purposed-led organisation, and this historical matter is not reflective of the AMP we are today.”
In the civil lawsuit, ASIC alleged the 174-year-old group once seen as a paragon of Australian finance, charged life insurance premiums and financial advice fees to the superannuation accounts of over 2,000 dead customer accounts.
AMP on Friday said it had remediated 10,155 customer accounts that were impacted from 2011 to 2019. The remediation totalled $5.2m and included compensation for lost earnings.
ASIC lawsuit accused AMP of failing to handle conflict of interests between the company and its advisors and did not ensure to have the systems in place to stop charges to deceased customers.
The unlawful charges were revealed at the year-long royal commission in 2018, which triggered a tumultuous period for the Sydney-based firm that led to the exit of its former chairman and two CEOs. AMP said the firm told the regulator about the charges to dead customers in June 2018.
“Both AMP Life Limited and AMP Financial Planning admitted that they engaged in unconscionable conduct by deducting and/or failing to properly refund insurance premiums and advice fees respectively from superannuation members after being notified of their deaths,” the regulator said in a statement on Friday.
In handing its decision, Justice Hespe described AMP’s conduct as “very serious, wrongful behaviour” and said the relatives beneficiaries of the estates of the deceased customers “may be expected to have been emotionally vulnerable and unlikely to be familiar with the terms of a policy not issued to them or on their behalf.”
He said part of the problem had been a lack of oversights and lack of management awareness of the issue.
“The culture of the AMP Group assumed no systemic issues. It resulted in a failure to have a process in place that was capable of identifying, investigating and remediating systemic issues for many years,” he said.
In the five years since the revelations at the inquiry, AMP has focused on turning around its operations under the leadership of Alexis George, who took the chief executive position in August 2021.
“We have made significant changes to our systems and processes in recent years designed to prevent this from recurring,” Mr Cullen said.
“We engaged constructively with ASIC throughout the legal process, and we acknowledge today’s judgment and the conclusion of the matter.”
AMP completed the sale of its life insurance business to Resolution in 2021, but the contingent liabilities for potential fines for several lawsuits remained with the ASX-listed company.
The company said its financial accounts for 2022 had provisioned for the fine in full.