AMP charged more than 4600 dead superannuation customers for life insurance, despite knowing there was no life left to insure.
AMP owes the superannuation members' deceased estates about $1.3 million, in the latest fees-for-no-service scandal to hit Australia's largest wealth manager.
AMP knew about a similar issue involving life insurance premiums not being refunded to deceased estates in 2016, the banking royal commission heard on Monday.
But it only started an investigation in April, after the royal commission revealed some Commonwealth Bank of Australia advisers had continued charging dead customers fees.
AMP Life then discovered premiums were still being deducted from the accounts of dead AMP superannuation members, despite it being told they had died and processing their death claims.
AMP blamed a number of system errors that meant it either did not stop deducting life insurance premiums from dead super members' accounts or did not process premium refunds owed to them.
By June when AMP reported the issue to regulators, it estimated $922,902 in premium refunds were owing to 3124 members.
AMP executive Paul Sainsbury revealed the number has now reached 4645 dead customers and $1.3 million in premiums.
Mr Sainsbury said the investigation was continuing and other fees may also be refunded.
"It does appear as though there are other fee types that have been deducted post the date of death that will need to be refunded as well," AMP's group executive wealth solutions and customer said.
The inquiry heard AMP knew about a similar problem in 2016 where insurance premiums continued to be charged after it was notified of a customer's death.
Mr Sainsbury agreed stopping the premiums being charged when AMP was notified a person was dead seemed a rather obvious step.
But the system in 2016 was coded to refund it when the claim was admitted, he said.
In one case, premiums continued to come out of a customer's superannuation account in June 2016 despite AMP being told of the death in February 2015.
The June 2018 breach report to the financial services regulator did not include the 2016 issue.
Mr Sainsbury said the issue this year was that amounts were not refunded to the member's estate.
"The issue in 2016 was not that they weren't refunded, it was just that they were refunded at a different time and we should have stopped deducting them on notification of death."
Mr Sainsbury agreed with royal commissioner Kenneth Hayne QC that AMP had charged for something it was not entitled to charge.
The royal commission's last hearing into superannuation also revealed cases of CBA and National Australia Bank charging advice fees to dead super members.
Australian Associated Press
