ASIC review leads to insurance changes

ASIC review leads to insurance changes | Insurance Business

ASIC review leads to insurance changes
An ASIC review of car insurance has led six insurers to agree to better inform customers about their car insurance renewal practices.

The review follows some consumer complaints concerning some insurers as customers have been “caught by surprise by automatic renewal,” the regulator said in a statement.

The six insurers that have agreed to better inform their customers are; AAI, Auto & General, CGU, Hollard, Progressive and Youi.

The law does not prevent insurers from automatically renewing car insurance policies but the ASIC review will see insurers update their telephone sales scripts alongside clearer, more prominent messaging on websites.

Deputy chair of ASIC, Peter Kell, welcomed the improvements and acknowledged the cooperation of the six insurers involved in the review.

“Automatic renewal of insurance may be convenient for some consumers but it is important that this is an informed choice,” Kell said.

“Other consumers may wish to take the opportunity to shop around when their insurance is due for renewal, to ensure they are obtaining the best value cover that meets their needs. These disclosure improvements will help reduce the risk of consumers being caught by surprise by an automatic renewal."

Kell noted that the regulator will continue to monitor the practice of automatic renewals throughout the insurance industry.

“Although ASIC's review of annual automatic renewals targeted car insurance, we encourage similar point of sale improvements in relation to other types of insurance as well, and will continue to monitor this issue.”