NSW regulator fines Suncorp $100,000 for CTP breaches

25 January 2023

The NSW State Insurance Regulatory Authority (SIRA) has fined Suncorp compulsory third party (CTP) brands AAMI and GIO $50,000 each for failing to meet internal review timeline obligations.

It’s the first time a civil penalty has been imposed on CTP insurers under the Motor Accident Injuries Act.

“The fines arise from breaches of AAMI and GIO’s internal review timeframes for the period 1 April 2018 to 31 August 2020,” SIRA says in a statement published today.

The regulator began investigations in response to complaints about delays experienced by customers seeking internal reviews. SIRA then issued three letters of censure to AAMI and five to GIO.

“Despite this action, during SIRA’s September 2020 monthly performance monitoring of internal reviews across the CTP scheme, AAI Limited reported further breaches of internal review timeframes for the period July to August 2020.”

SIRA then began a further investigation into the “ongoing issues” between April 2018 to August 2020, “identifying breaches and contraventions of the Act, the Motor Accident Guidelines, and their licence conditions”.

The regulator issued show cause notices to the insurers in May 2022, before deciding the “appropriate regulatory response” was a civil penalty of $50,000 each for AAMI and GIO. The Act provides for fines up to $110,000.

“Factors taken into consideration in deciding on the penalty included the experience of customers, acknowledgement by AAI Limited of their conduct, significant efforts made to address the backlog of internal reviews and communicate options to customers, and the development and implementation of a remediation plan.”

SIRA says it will continue to closely monitor the insurers’ performance and compliance.