Australian Securities and Investments Commission (ASIC) Acting Chairman Peter Kell says insurers that provide so-called add-on insurance should be taking active steps to change deficient products.

The commission has ordered insurers to refund money paid for deficient add-on cover sold through car dealers, with the total so far more than $120 million.

Mr Kell says the refunds make up one of the regulator’s largest compensation programs and send a strong message to insurers.

“Add-on insurance has been under the spotlight for some time now,” he said. “Insurers should be taking active steps to ensure their customers are not being sold products that provide little or no value.”

As reported by insuranceNEWS.com.au in a Breaking News bulletin, ASIC said earlier this month that Allianz will refund $45.6 million to 68,000 customers, while Suncorp will refund $17.2 million.

Late last month the regulator said IAG brand Swann Insurance will refund $39 million under a crackdown that has seen QBE and Virginia Surety face similar orders.

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.

In 2016 the regulator released three reports on add-on insurance sales through car dealers, warning in many cases it is unlikely customers can claim on the products, which offer little or no value.

“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 been, are appropriately remediated,” Mr 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.”

ASIC has also ordered National Warranty Company to refund about $4.9 million to 6367 customers because its commission incentives breached the prohibition on conflicted remuneration. The commissions encouraged sales staff to sell warranties at the highest possible price.

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