ASIC 'very carefully' watching pricing practices as remediation tops $760 million

ASIC ‘very carefully’ watching pricing practices as remediation tops $760 million

17 October 2022

The corporate regulator says it continues to keep a close watch on the industry’s pricing practices as customer remediation over failures to deliver promised premium discounts reaches $760 million.

“The whole pricing area in insurance is one that we’re focusing on very carefully,” Australian Securities and Investments Commission (ASIC) Deputy Chair Karen Chester told the House of Representatives Standing Committee on Economics last week.

“We’ve got that remediation work underway. We’ve had the pricing reviews undertaken by those general insurers. Those reviews are now with us. They’re going through a process of fixing, finding and repaying.”

She says 11 general insurers have to date reported back to ASIC after the industry was asked to review its pricing practices. The order came after ASIC last year commenced action against IAG over its failure to honour customer discount promises.

“They’ve all undertaken that review,” Ms Chester said. “Eleven have reported back to us. Out of that, we now have a remediation tally of about $760 million. This is a very recent activity. This is

not something that was from the Hayne royal commission; this is recent conduct.”

She says the insurers are now in the “fix and find phase” and that repaying – which is remediation – is getting there as well.

“It’s an area that we’re going to continue to look at more closely, and we’ll have a report going out on that early next year,” Ms Chester said.

“Then we’ll probably look at some price optimisation issues as well.”