Commission payments and authorised representative training for add-on product sales will be under scrutiny as part of a class action against IAG subsidiary Swann, Federal Court documents show.

A preliminary hearing has been before Justice Jacqueline Gleeson to consider the appointment of sub-group members and to clarify matters to be considered at an initial trial.

The court document shows issues include the business model and sales system, claims ratios for add-on products and their value, and whether conduct was misleading or deceptive “leaving aside any relevant facts which are peculiar to the applicant or a particular group member”.

Questions include whether training of authorised representatives (ARs) aimed to create in a customer’s mind a perceived need to buy one or more of the add-on products.

“Were the ARs financially incentivised, encouraged, compelled, forced and/or strongly urged by Swann to sell as many insurance products as possible?” the document asks.

It also questions if commissions made it likely an AR wouldn’t disclose that a product was not suitable or would not represent value for money for a particular consumer.

IAG is defending the class action, filed by solicitors Johnson Winter & Slattery with funding from Balance REV.

The proceeding concerns six add-on products sold along with vehicle or motor cycle purchases between January 2008 and August 2017.

IAG and Swann say the proceeding spans up to 673,000 individual transactions entered into by several hundred thousand policyholders.