The Australian Securities and Investments Commission (ASIC) has detailed its continuing effort to tackle insurer pricing misconduct in its annual report.  

The regulator says insurers should ensure they are working on recommendations from earlier in the year to address non-financial-related faults causing pricing failures and consumer harm.   

In June, following action from ASIC, IAG was fined $40 million by the Federal Court, the largest ever penalty imposed by a court against an insurer for financial breaches, after it was found to have failed to follow discount promises offered to customers under its NRMA branded motor, home, boat and caravan policies.  

ASIC also took action against RACQ in February after it alleged the insurer misled customers about what discounts they were entitled to. This proceeding is ongoing under the Federal Court’s jurisdiction, with the next court date in December.   

The regulator says its interventions into industry malpractices led to remediation payments amounting to $815 million for 5.6 million customers.   

It says it will continue to work to ensure an “efficient and competitive insurance marketplace” that supports insurers meeting pricing promises and providing increased customer transparency to pricing decisions.   

“This year, ASIC’s work in insurance focused on investigating general insurance pricing practices, preparing for the implementation of reforms to the unfair contract terms regime, and working with industry to improve practices,” the report said.  

ASIC also highlighted efforts to address areas of concern relating to insurance outcomes provided from superannuation funds, noting issues with poorly valued policies, deficient claims handling processes, and communication failures regarding consumer understanding of cover.   

The regulator says trustees have adequately addressed the highlighted issues following consultation with ASIC, providing improved outcomes for members and policyholders.  

Click here to access ASIC’s annual report.