The advisers who churned their clients stood to pocket higher commissions from rewritten policies than if they had told clients to simply transfer their existing cover.

AMP does not dispute there was "churning" by several advisers, and last month admitted that it as the licensee also breached the law, but the debate is over how many breaches occurred.

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Appearing before Justice Michael Lee, ASIC's barrister Dr Sarah Pritchard, SC, on Wednesday argued the wealth manager made a contravention every time one of its planners broke the law.

Dr Pritchard referred to internal emails from 2013 that she said showed AMP knew the conduct was "common" and "widespread," and it failed to deal with the issue promptly.

She described insurance churning as a "very serious" matter, and said AMP had "deliberately"decided not to make changes to a policy that dealt with how customers were transferred to different life insurance policies.

The size of the penalty facing AMP will depend on how many contraventions it committed. Justice Lee on Wednesday said that for him to find AMP made 120 contraventions, as ASIC is pushing for, he would need to go against precedents from other cases.

Justice Lee said he found it "a little odd" that he was required to deal with the question in a "vacuum" about how widespread the practice actually was within AMP.

ASIC is arguing that if its push for 120 breaches is not accepted, the court should find there were six breaches, which would result in a penalty of $4.5 million to $5.1 million.

AMP, represented by Elizabeth Collins SC,  is arguing for a different interpretation of the law, by saying there were two sets of circumstances that gave rise to its failure to take reasonable steps. Ms Collins is expected to continue to making AMP's case on Thursday.

A spokeswoman for AMP said its primary submission would be there were two contraventions. "AMP has continued to enhance its monitoring and supervision processes, including stronger data analytics, to
help protect clients against insurance rewriting. We contend insurance rewriting was not a widespread practice at AMPFP," the spokeswoman said.

Meanwhile, ASIC on Wednesday announced that a further 30,000 customers would be compensated a total of $14.7 million for add-on insurance sold by car dealers.