Credit insurance refunds
18 Jan 2018
Australian consumer credit insurance refunds amount to around A$120M as insurers forced to refund customers for the sale of worthless add-on consumer credit insurance.
As part of a corrective programme, the Australian Securities and Investments Commission (ASIC) yesterday announced that Allianz and Suncorp have been forced to return a combined A$63 million to customers collected from insurance add-ons and financing sold through car dealerships.
ASIC announced that Allianz Australia will refund A$45.6 million to 68,000 customers for add-on insurance sold through car dealerships that were of little to no value. ASIC had a number of concerns about the design and sale of a range of Allianz add-on insurance products sold through car dealerships across Australia between 1 December 2010 and 30 November 2017.
Suncorp will refund 41,428 add-on insurance customers A$17.2 million for insurance bought through car dealerships that provided little or no value to consumers. The insurance was provided between 2009 and 2017 by MTA Insurance, owned by Suncorp.
In a statement, ASIC Acting Chair Peter Kell said: 'The refunds offered by Allianz, together with those from other insurers, make up one of the largest compensation programmes achieved by ASIC, with over A$120 million in refunds to consumers as a result of ASIC shining a spotlight on these poor consumer outcomes.”
He said that the large-scale remediation sent a strong message to add-on insurers. He said: “Add-on insurance has been under the spotlight for some time now. Insurers should be taking active steps to ensure their customers are not being sold products that provide little or no value.
“ASIC's work on add-on insurance is all about making sure customers are being sold insurance that meets their needs and if they haven't, are appropriately remediated.”
- Asia Insurance Review