The Australian Securities and Investments Commission (ASIC) is working with IAG subsidiary Insurance Australia Limited (IAL) to fix issues the insurer has been having with policy discounts offered to customers.

Some IAL policyholders are entitled to certain premiums discounts if they have multiple policies or linked policies with the insurer, but some haven’t receive the benefits. The cause has been traced to glitches in the company’s IT system.

ASIC Executive Director of Enforcement Jan Redfern says IAG came forward with the issue early – in fact, more than a year ago.

“ASIC’s priority is to ensure the interests of consumers are protected,” she said. “In doing so, we need to be made aware of problems or issues early so that we can work with the licence holder to reach an appropriate outcome.”

Gary Dransfield, who heads up retail sales and service in IAG’s Personal Insurance division, says the percentage of customers affected is small, and most refunds will be less than $50. He says the insurer “recognised early on” the importance of getting ASIC involved, and is now well on its way to fixing the problem.

“We’ve already sent full refunds plus interest to customers that we have identified as being affected,” he said. “These errors occurred because some customers had more than one customer record, or ‘identity’, on our insurance system, preventing the discount from being correctly applied.”

ASIC says IAL has agreed to upgrade its system. The company has also been issued with a direction under the Corporations Act, which requires it to provide regular reports on the compensation of its clients to ASIC.