IAG has come under fire for misleading consumers in advertising and policy documents related to comprehensive motor insurance.

The Australian Securities and Investments Commission (ASIC) says the use of “maximum no claim discount for life” in car insurance advertising and policies offered by providers NRMA, SGIC and SGIO is misleading for consumers.

ASIC says the insurer did not make it clear that premiums are affected by the claims and incident history of the drivers. Customers would retain the 65% discount for the duration of the insurance, but as claims and incidents affect the premium rates, this could lead to an increase in the rate charged.

NRMA, SGIC and SGIO Head of Retail Sales and Service Gary Dransfield says the insurers are keen to ensure comprehensive motor customers fully understand the policy and have taken steps to deal with ASIC’s concerns.

The insurers have changed their product disclosure statements, amended websites and advertised the changes in mainstream newspapers. They will be pointing to details of the discount on customers’ insurance certificates and have agreed to waive cancellation fees for any consumers misled by the policy.