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General Insurers should review their pricing

Friday 15 October 2021

 
 
General insurers need to review and update their pricing systems and those who fail to take risk enforcement action.
 
This message to the general insurance industry comes as the Australian Securities Investments Commission(ASIC) begins civil proceedings against Insurance Australia Limited for misleading and deceptive conduct. 
 
ASIC alleges misleading and deceptive conduct is related 
pricing.  
 
The regulator said, "ASIC alleges that this practice impacted NRMA Insurance renewals between March 2014 and November 2019 and affected at least 596,000 customers, in respect of 705,000 separate insurance policies, approximately 1,785,000 times. The affected customers did not receive promised discounts totalling around $60 million."
 
The regulator goes on highlight four things that general insurers can do: 
 

  • identify any differences between the prices (including discounts) they promised their customers (over at least the past five years) and what those customers were charged;
  • comply with their breach reporting obligations;
  • remediate any customers impacted, including refunding overpaid premiums; and
  • fix the systems, processes, controls and governance practices that have led to promised discounts not being honoured.
 
 "Where there are failures or empty promises about price discounts, ASIC will use the full range of regulatory tools available to protect consumers," ASIC Deputy Commissioner Sarah Court said in formal statement.