Commonwealth Bank faces more compensation over insurance

Commonwealth Bank CEO Matt Comyn. Photo / Supplied

The Commonwealth Bank faces paying compensation to more than half a million customers who were sold dud add-on insurance policies.

The bank's chief executive Matt Comyn said they may have to extend its compensation program to cover those if necessary, according to SBS News.

Commonwealth Bank is already paying A$46 million ($48.9m) to 154,000 customers over the mis-selling of credit card and loan protection insurance.

Comyn told a banking royal commission his bank had failed to prevent misconduct and to identify and resolve it as soon as misconduct was discovered.

He said the bank had been caught in a vicious cycle of reacting to dodgy practices rather than stopping it from happening in the first place.

"We seemed to be caught reacting, responding, remediating, in an ever increasing cycle of that without actually truly understanding the root cause, making the appropriate investments to actually prevent issues from recurring," he said.

"Ultimately that's why I say we get into a period of ongoing remediation without actually fundamentally understanding the root cause in each of those matters and making demonstrable steps to ensure they don't recur."

Commonwealth Bank is the owner of New Zealand's ASB.

- With news.com.au