Financial regulators have ordered life insurance companies to review their policies following complaints about rises in the cost of premiums and poor quality information.

In a joint letter to all insurers, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission said they had concerns companies had not acted appropriately in raising their premiums for customers.

“We are concerned that some life companies have not acted in accordance with the reasonable expectations created through the relevant disclosure and marketing material,” the letter said.

“These concerns indicate that some life companies do not have effective systems, processes and controls in place.”

The financial watchdogs have asked all life insurance companies to review their past premium increases and whether the increases had been applied accordingly with the terms of the policy.

Companies were also asked to determine whether any marketing had made clear to customers about future premium costs and how they could change over the life of the policy.

Life insurance companies will have until the end of March to complete the review and hand in their findings.

The letter said the watchdogs were concerned some companies did not have measures to make sure that any marketing of premiums were not misleading, and that premium rises were done clearly.

The warning follows concerns raised by customers as well as reportable situations from different insurers.

“Life companies should consider the appropriateness and clarity of disclosures and marketing material as they relate to future premium increases,” the letter said.

“(They should) consider how to manage the reasonable expectations of policyholders around premium increases in an ongoing manner.”

Life insurance companies will be ordered to report to the watchdogs on what steps they plan to take to rectify the situation and whether their actions would meet regulator expectations about how products are designed.

– AAP