ASIC crackdown costs insurers more than $120 million
Two more insurers have been ordered by ASIC to repay customers money for deficient add-on cover sold through car dealers, bringing the total so far to more than $120 million.
The Australian Securities and Investments Commission (ASIC) said today that Allianz will refund $45.6 million to 68,000 customers, while Suncorp will refund $17.2 million.
In late December the regulator said IAG brand Swann Insurance will refund $39 million as part of a crackdown that has already seen QBE and Virginia Surety affected by similar orders.
“The refunds…make up one of the largest compensation programs achieved by ASIC,” Acting Chairman Peter Kell said.
“Our message to insurers is simple: the needs of your customers must come first in the design, price and sale of your products.
Mr Kell says add-on insurance has been under the spotlight for some time and insurers should be taking active steps to address the issue.
Allianz will also make a community benefit payment of $175,000 to a financial literacy organisation.
The Suncorp refund relates to products provided by MTA Insurance.
“ASIC’s work on add-on insurance is all about making sure customers are being sold insurance that meets their needs and if they haven’t, are appropriately remediated,” Mr Kell said.
The regulator says in many cases it is unlikely customers will be able to claim on the products, which offer little or no value.