ASIC has forced QBE Insurance to honour travel insurance policies that cover the costs of Ansett tickets cancelled after the airline collapsed last year. The insurer has agreed to the arrangement under an enforceable undertaking.

The ASIC action has come with a warning to all insurers that the regulator will be examining their claims-handling procedures over the next 12 months.

QBE is required to contact all Ansett travelers who purchased travel insurance from it between September 10 and September 14 and reconsider claims relating to the collapse of Ansett. It will be forced to pay all valid claims within 14 days of assessment.

QBE will also be bound to the final decision of the Insurance Enquiries and Complaints in relation to claims made for flights booked using frequent flyer points and then cancelled due to the collapse.

The action from ASIC resulted from QBE’s behaviour between September 10 and 14. ASIC said that on September 10 QBE presumed that Ansett’s collapse was foreseeable and as a result would not pay travel claims on policies relating to the airline from that date. However, many customers were not told about QBE’s decision.

Between September 10 and 14, 3,000 domestic air travel policies were sold. QBE received 600 claims resulting from those travel policies.

ASIC became concerned that this type of conduct may have breached section 52 of the Trade Practices Act, which covers behaviour that is misleading or deceiving or likely to mislead or deceive consumers. Executive Director of Consumer Protection Peter Kell said ultimately ASIC is keen to ensure that policyholders are treated fairly, efficiently and consistently when they make claims.

QBE CEO Frank O’Halloran said the company agreed to the enforceable undertaking in the interests of policyholders and also for commercial reasons. And Australia MD Raymond Jones added that it was QBE which came to the rescue of those with travel claims and those left without travel insurance as a result of HIH’s collapse last year. “QBE has paid up to 11,000 travel claims from the Ansett collapse and we will deal with the remaining small number of claims as quickly as possible,” he said.