A car dealerships add-on insurance class action involving Suncorp will be settled for $34 million if a court hearing in June approves the proposed agreement.

Law firm Maurice Blackburn says in newspaper advertisements today that class action members have until May 27 to object to the settlement, which involves no admission of liability.  

On April 4, the Supreme Court of Victoria cleared the way for a notice to be sent to members and published in newspapers. The settlement approval hearing is set for June 30.  

Some of the money will be used for legal and administration costs and a “reimbursement payment to the plaintiff”.

“The rest of the settlement sum will be shared proportionately between eligible registered group members, according to a formula or method that the court approves,” the lawyers’ notice says.

The lawsuit involved sale of the add-on products through MTA Insurance, which Suncorp acquired in 2014 and later brought under its AAI subsidiary. It was alleged the products had reduced or no value and were sold to consumers in ways that breached the law. 

Suncorp, which no longer sells add-on cover through car dealers, said in February that while allegations continued to be denied, an agreement had been reached to settle.

“The agreed settlement will not have any material financial impact on Suncorp,” the company said.

The class action included people who bought add-on products between May 1 2006 and June 30 2018 when they bought or leased a vehicle through a car dealer using a loan it arranged.  

The products included loan protection insurance, equity or equity plus insurance, cash benefit insurance, extended vehicle warranty insurance and tyre and rim insurance.

The Australian Securities and Investments Commission has previously acted against insurers over add-on products it said provided little or no value to consumers. Laws governing the products’ sale have since been strengthened.

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