NSW’s State Insurance Regulatory Authority (SIRA) has issued a letter of censure to IAG after it found that the insurer, operating under the NRMA Insurance brand, had delayed weekly payments for 43 Compulsory Third Party (CTP) claims.  

The regulator says the censure motion comes after it had issued a show cause notice to NRMA Insurance on May 3 requesting it to respond to initial findings from an investigation.   

The investigation found that NRMA Insurance had failed to provide statutory weekly benefit payments within 10 business days concerning the claims between July 1 and September 12 last year, in a breach of the Motor Accident Injures Act 2017 and clause 10 of its standard licence conditions.  

But the regulator notes the insurer’s compliance with the investigation and self-reporting of the payment failures as contributing factors to its decision to issue the censure letter rather than financial penalties.  

NRMA Insurance advised SIRA that after receiving the show cause notice, it began developing an automated exception reporting system to ensure liability payments were made within 10 business days. In April, before SIRA’s show cause notice, the insurer reported 85% compliance with making payments within 10 working days.   

“Although the current level of compliance performance in this area is below the expected levels, the Authority has taken into account NRMA Insurance’s self-reporting of this breach and its remediation actions, and therefore has issued a letter of censure instead of imposing a civil penalty,” SIRA’s Motor Accidents Insurance Regulation Executive Director Petrina Casey wrote.  

“Whilst in this instance a letter of censure has been considered appropriate, if in future the authority becomes aware of ongoing non-compliance of a similar nature, it may result in a more serious outcome, such as the imposition of a civil penalty.”    

SIRA has issued four censure letters to NRMA Insurance this year, most recently in May, concerning errors and delays with its CTP responses.