IAG has fended off a regulator's attempt to strip legal professional privilege from a key document tied to its $380 million pricing remediation program.
In Australian Securities and Investments Commission v Insurance Australia Limited [2026] FCA 107, handed down on February 18, 2026, Federal Court Justice Rofe dismissed an application by ASIC seeking to declare that a technical report prepared during IAG's internal pricing investigation was not privileged. ASIC had hoped to use the document as evidence in a class action trial set for April 2026.
The report at the centre of the dispute — referred to as the Technical Paper — was prepared in 2020 by Wei Lin, an actuary and principal at consulting firm Finity, who had been seconded to IAG. It examined pricing issues within IAG's insurance products, zeroing in on whether pricing algorithms were properly applying discounts that had been advertised to customers.
Those issues first came to light in mid-May 2019 after Deloitte, which was assisting IAG on a remediation project for customers of HBF Health Insurance, flagged potential problems with how discounts were being applied. Three issues were identified internally. One, involving a pricing mechanism known in the industry as "capping and cupping," was dealt with first and reported to ASIC as a breach in September 2019. The other two, which involved pricing for renewing customers, proved far more complex.
To tackle the wider problem, IAG stood up a Pricing Taskforce in late 2019. It was no small operation. At its peak, the taskforce involved up to 300 people, including external consultants and newly created pricing integrity roles. The expected bill for customer refunds reached approximately $380 million across some four million policies, with program costs hitting an estimated $115 million.
Mr Lin was brought in as part of that effort. His job, as the court heard, was to investigate the technical detail of pricing issues and translate them into something the legal team could work with to assess whether financial services laws had been breached. He operated under tight confidentiality protocols — working in a secure room, storing drafts in restricted-access locations, and marking all documents as confidential and privileged.
ASIC argued that the Technical Paper was not created primarily for legal advice. It pointed to the document's distribution to pricing and compliance teams and suggested it served multiple purposes. The regulator also took aim at IAG's decision not to call Ian Brealey, the company's executive manager of pricing, as a witness.
Justice Rofe was not persuaded. The court found that the report was commissioned by Mark Kimberley, IAG's executive manager of legal for insurance, reinsurance, and distribution, after senior in-house counsel recognised they needed actuarial expertise before any legal advice could be given. The involvement of other teams, the court found, was incidental to that core legal purpose.
The ruling also addressed a separate procedural question about whether courts can inspect privileged documents beyond the one actually in dispute. Justice Rofe held they cannot — a finding that may carry weight in future privilege contests across the industry.
The class action between ASIC and Insurance Australia Limited and Insurance Manufacturers of Australia Pty Limited remains on foot, with the liability trial listed before Justice Anderson in April 2026.
