NRMA will face the Federal Court having been accused of failing to honour discount promises made to its customers on more than 1.7 million occasions.
The Australian Securities and Investments Commission (ASIC) has alleged NRMA made false or misleading representations to 596,000 customers about discounted prices.
ASIC has alleged NRMA told customers they were eligible for certain discounts on renewals of their home and motor insurance policies but then failed to apply the discounts.
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In total, ASIC said between March 2014 and November 2019 the affected customers did not receive their promised discounts, totalling around $60 million.
“ASIC is calling on general insurers … to ensure customers get the full discounts they are promised,” ASIC deputy chair Sarah Court said.
“Where there are failures, or empty promises about price discounts, ASIC will use the full range of regulatory tools available to protect consumers - including enforcement action.”
It’s not the first time ASIC has cracked down on insurers. The commission has so far retrieved more than $400 million to more than 2 million home and other insurance customers since 2018.
“All insurers should take urgent steps to ensure they can and do meet the pricing promises they make,” Court said.
Previous insurer payouts
Since 1 January, 2018, general insurers have self-reported a significant number of breaches or potential breaches to ASIC and paid back thousands of customers in relation to failures to honour price discounts promised to customers.
Here are some of the biggest payouts that have so far been made:
Insurance Australia Group is undertaking repaying around $377 million to customers through brands including NRMA Insurance, CGU, RACV, SGIO, SGIC and Coles Insurance
AAI has remediated more than $8 million to customers. AAI is part of the Suncorp Group and issues insurance through brands including GIO, AAMI, Apia and Shannons
QBE Insurance is remediating approximately $15 million to customers
Allianz Australia has returned more than $600,000 to customers.
Westpac General Insurance (now Allianz Australia General Insurance Limited) returned $13 million to customers
Commonwealth Insurance has remediated around $590,000 to customers
RACQ Insurance is remediating more than $3.4 million to customers
The Hollard Insurance Company has repaid around $105,000 to customers