The Australian Securities and Investments Fee (ASIC) has commenced Federal Court docket motion that alleges RACQ Insurance coverage misled prospects over pricing low cost guarantees.
ASIC says motor, dwelling, caravan and trailer and distinctive automobile coverage disclosure statements indicated that reductions can be utilized, however they solely utilized to the bottom premium and to not extra quantities paid for sure optionally available extras.
“We allege that RACQ misled its prospects concerning the reductions to which they have been entitled,” Deputy Chair Sarah Court docket mentioned. “The failure by insurers to ship on pricing guarantees is a key precedence for ASIC and we are going to proceed to take enforcement motion to carry insurers to account on this regard.”
The affected optionally available advantages have been extra free windscreen, rent automobile, no declare low cost safety, elevated caravan contents, pet, cell phone, small susiness contents and objects away from dwelling, in addition to the additional premium charged for family insurance coverage bought for unoccupied properties.
The motion in opposition to RACQ, which pertains to cowl offered between February 2017 and March 2022, follows related court docket motion launched in October 2021 over IAG pricing low cost guarantees.
The matter in opposition to IAG subsidiary Insurance coverage Australia Ltd (IAL) is listed for the Federal Court docket on April 3 for an estimated two-day listening to.
RACQ Insurance coverage self-reported its points after ASIC referred to as on insurers to overview their pricing practices in October 2021.
The insurer has since accomplished a broader pricing guarantees overview, has up to date product disclosure statements and has been working carefully with the regulator by way of a remediation program.
The insurer says the vast majority of refunds for the matter are anticipated to be issued by June.
“As a member-owned membership, we take our obligations and obligations critically and can use this chance to make sure our members are higher served as we transfer ahead,” it says in an announcement acknowledging the ASIC motion. “RACQ apologises for these errors as they don’t seem to be in line with our excessive requirements and values.”
RACQ says it’s been enterprise a big funding in programs and processes that can ship improved outcomes, stronger threat administration, simplified merchandise and simpler processes.
