Suncorp fines over the misleading complete replacement cover advertising amounted to a tiny fraction of the $426 million annual premium income received from the products, the commission hears.

Commissioner Kenneth Hayne suggests the fine could be considered “a very low cost of doing business”.

ASIC issued four infringement notices, each for $10,800 relating to the advertising. The penalties covered radio and online ads first flagged as a concern and also for a new television advertisement released early last year.

Ms Orr questioned Mr Dransfield over the company’s decision to pay the penalty, when it believed it had done nothing wrong, rather than go to court. Maximum penalties in that case could have been $1.8 million for each contravention.

Ms Orr says that in paying the small infringement the balance of commercial risks and rewards in this situation had paid off for the insurer.

“The reputational impact is significant, irrespective of the fine,” Mr Dransfield says.

The commission has taken a break for lunch.