ASIC sues QBE over misleading pricing discounts
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The news: The Australian Securities and Investments Commission (ASIC) has taken QBE to court, alleging the insurance giant misled customers about the value of discounts offered on some general insurance products.
The numbers: The financial regulator has alleged QBE made statements and sent renewal notices promising discounts on premiums for a range of general insurance products, which customers did not receive.
The discounts were offered through more than 500,000 renewal notices on home, contents and car insurance between July 2017 and September 2022.
The context: ASIC said the court proceedings have been filed in the Federal Court, with the regulator seeking civil penalties, declarations and adverse publicity orders. It has alleged that QBE’s pricing model potentially eroded the discounts received by over half a million customers, in some cases to nil.
The discounts were offered to retirees, loyalty customers, QBE shareholders, those holding multiple QBE policies, and those holding QBE policies and who had made no claims. Statements offering pricing discounts were also made in various product disclosure statements published on QBE’s website.
QBE said it had undertaken a remediation program for impacted customers in July 2022 following an external review into its pricing practices.
Last year ASIC took insurer IAG to court for misleading customers about loyalty discounts on home insurance products. IAG has previously also been penalised $40 million over pricing discount failures, while RACQ had to pay a $10 million penalty for pricing discount failures.
What they said: In a statement QBE said: "QBE apologises for the inconsistencies. QBE understands the importance of meeting its promises to its customers. QBE will review the pleadings and continue to work with ASIC on these matters".
"The failure by insurers to deliver on pricing promises is a key priority for ASIC and we will continue to take action to hold insurers to account," ASIC deputy chair Sarah Court said in a statement.
"Where insurers make discount promises to renewing customers, they need to have robust systems and controls in place to make sure their customers receive the discounts they were promised."
The sources: ASIC, ASX announcement
