The Australian Securities and Investments Commission (ASIC) has launched Federal Court proceedings against RACQ Insurance Limited (RACQ), alleging the insurer sent more than half a million customers misleading renewal documents over a five-year period. According to the regulator, the big Queensland insurer distributed over 570,000 renewal documents for more than five years, each containing representations about a "last period premium" amount that ASIC claims were “false or misleading.”
In a media release, ASIC has alleged that in many instances, the "last period premium" shown was higher than what customers had actually paid — often after negotiating discounts or making policy changes — resulting in a distorted impression of premium increases.
ASIC Deputy Chair Sarah Court (main picture) said the regulator is prioritising enforcement against insurers who fail to deal fairly and in good faith with customers. “During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents,” said Court.
In the release, ASIC highlighted a case where an RACQ customer received a renewal notice showing a ‘last period premium’ of $6,930.55 and a new premium of $7,033.57—a 1.5% increase. In reality, the customer had paid only about $5,000, meaning the actual increase was 40%.
“RACQ didn’t just make it difficult to compare apples with apples, we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium,” the deputy chair said.
Court said the insurer claimed it was providing “pricing transparency” to members and a “more open, fair and honest member experience." However, she said ASIC alleges "their misleading comparison pricing did the exact opposite." ASIC is seeking declarations, civil penalties and publicity orders from the Court.
