However,Chester said there were some proceedings and investigations still underway and that ASIC would take a closer look at other pricing practices such as loyalty taxes.
Loading
In October 2021,ASIC called on all general insurers to review their pricing practices,systems and controls to ensure consumers received the full discounts they were promised.
Later that month,the regulator wrote to 11 insurers representing 68 per cent of the general insurance market in Australia,requiring them to comprehensively review any inconsistency or possible inconsistency between the pricing promises made to consumers and the promises delivered,and to find,fix,repay and report any pricing failures.
The reviews identified substantial failures to deliver on promised price discounts,benefits and rewards.
ASIC said there had been ongoing underinvestment in systems,processes and data,and that pricing misconduct risks had been worsened by too much complexity in promise design and delivery.
The regulator first put general insurers on notice of pricing misconduct risks through a public announcement in 2013,published a report in 2015 and issued a further public reminder in 2017.
Chester said it was “beyond disappointing” that it had taken insurers years to act after being given direction to review their processes and that the regulator would enforce the law if firms did not comply.
“It’s not ASIC’s job to hold insurers’ hands on the remediation process,” Chester said.
“But if we learn through targeted surveillance that the remediation hasn’t met obligations,we will investigate and potentially take enforcement action.”
ASIC has commenced civil penalty proceedings against Insurance Australia Limited and RACQ Insurance Limited for misleading consumers and failing to honour promised discounts,and have commenced other investigations into general insurers.
The regulator said general insurers were fixing failures and improving processes and product governance.
“Some insurers have issued revised disclosure documents,several are reviewing existing products and discounts to simplify them,and others are undertaking risk transformation plans,” it said.
Loading
An IAG spokesperson said almost all of the company’s refunds had been issued to customers who were impacted by issues identified in its remediation program.“The remainder of the remediation is on track to be sent over the next couple of months,” the spokesperson said.
“We regret these failures,we appreciate their significance,and we’ve apologised to those customers impacted.”
Since October 2021,participating general insurers have notified ASIC of more than 600 additional reportable situations involving potential or suspected pricing failure.
The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.