QBE Insurance will refund up to $15.9 million to consumers sold add-on insurance through car dealerships that provided little or no benefit, the Australian Securities and Investments Commission (ASIC) says.

More than 35,000 consumers bought the products, sold as QBE guaranteed asset protection (GAP) and consumer credit insurance (CCI), between 2011 and this year, according to the regulator.

QBE will also make a $50,000 payment to Financial Literacy Australia.

“This large-scale remediation by QBE is a direct result of our 2016 add-on insurance review, which uncovered the widespread sale of insurance with little or no value to consumers,” ASIC Deputy Chairman Peter Kell said.

“We put all add-on insurers on notice following our review, and we welcome efforts made by QBE to address poor consumer outcomes. Insurance must meet the needs of the consumer first and foremost. All add-on insurers should review the sale of policies and refund consumers who were sold policies they didn’t need.”

The ASIC review found GAP products provided consumers with more insurance than they needed, duplicated existing covers and were sold when there was unlikely to be a gap between the insured value of the car and the loan balance.

CCI policies were sold to young people who had no dependants and were unlikely to have any need for the cover.

ASIC’s report found car dealers were paid commissions of up to 79% and the claims payout ratio was only nine cents for every dollar of premium paid, compared with 85 cents for car insurance.

QBE says it has started writing to affected customers.

“We take our responsibility to provide quality, value-for-money products seriously and we’re committed to doing the right thing by our customers and the broader community,” a spokesman said.

“While we have a relatively small market share of the add-on insurance market sold through motor dealers, we strongly support measures to improve the value, transparency and sales process of add-on insurance products.

“When ASIC raised concerns about these products, we were at the forefront of industry reforms and proactively reduced our commissions because it’s the right thing to do.

“QBE believes a consistent commission cap for all add-on insurance products sold through motor vehicle dealerships, when coupled with our review of products and sales processes, will deliver improved outcomes for customers.”