The Federal Court has ordered RACQ Insurance (RACQ) to pay a $10 million penalty for “potentially misleading customers” about pricing discounts for insurance coverages.
A media release from the Australian Securities and Investments Commission (ASIC) said the discounts were in product disclosure statements (PDS).
“ASIC identified pricing promises in insurance as an enforcement priority this year, and will continue to monitor marketing and pricing practices in the industry, and use the full range of regulatory tools available to protect consumers from general insurers failing to honour promised discounts,” said ASIC deputy chair Sarah Court (pictured above).
The release said the Court found that RACQ sent out the misleading PDSs at least five million times between 2017 and 2022.
More than 450,000 customers missed out on about $86 million in discounts, said the release.
“ASIC brought this case in February 2023,” said Court. “We are pleased it has reached a conclusion within a year, with a significant penalty handed down and a clear message to the insurance industry that failures in pricing practices will not be tolerated.”
RACQ admitted to the contraventions, said the release, and agreed that the penalty was appropriate. The firm was also ordered to pay ASIC’s court costs.
RACQ is a wholly owned subsidiary of The Royal Automobile Club of Queensland, a mutual organisation with about 1.8 million members.
The company offers general insurance products including household, motor vehicle and caravan and trailer coverages.
