Both Allianz and Suncorp (through its subsidiary MTA Insurance) will refund $45.6 million and $17.2 million respectively after ASIC found insurance sold through car dealerships provided no value to customers.
The refunds apply to four add-on insurance products sold by Allianz – motor equity insurance, loan protection insurance, tyre and rim insurance, and warranty insurance.
ASIC said it was concerned with the sale of these products for numerous reasons, including that “customers were over-insured because they were sold a higher and more expensive level of cover than needed” and would sometimes be ineligible to make a claim on the policy they were sold.
According to the regulator, Allianz will repay premiums on policies that are of “little to no value”, offer partial refunds to customers sold more insurance than was needed and to customers who purchased motor equity insurance but who also held Allianz comprehensive car insurance.
Refunds paid by MTA Insurance apply to MTA guaranteed asset protection insurance and MTA consumer credit insurance.
ASIC said guaranteed asset protection clients would be unlikely to make a claim on their policy, and the coverage duplicated existing coverage under the company’s comprehensive car insurance.
Additionally, ASIC said the life cover sold to young people through the consumer credit insurance was often not needed.
Suncorp will provide refunds to guaranteed asset protection clients whose policies were in effect at 1 September 2017, and will offer to refund life and trauma premiums to consumer credit insurance customers who were 25 years old or younger when the policy was sold to them.
Suncorp will also pay a $50,000 community benefit, ASIC said.
I hope 81alpha had a degree
When a client asked me to help her with a loan protection claim after her alcoholic husband committed suicide, guess what 3 exclusions were there. Alcohol, suicide and drugs. I am sure the wife would not have taken up this insurance knowing her husband was an alcoholic. The Bank manager who sold it forgot to disclose this fine print. But the definition does not state anything about what amount of alcohol you need to have for an exclusion. In fact it could be “”any” amount of alcohol. Just be careful with those chocolate liqueurs you are eating. It could mean a declined claim if you hurt yourself. Oh, by the way…after a lovely chat with the insurance company we had the claim paid. Woohoo!!
Did Allianz or Suncorp have to refund the interest on the $45.6.
Good business strategy. Steal 10 million hold it and invest it (and get interest) then when you get caught give the capital back and pocket the interest.
Allianz was caught defrauding the general public to the tune of $46,000,000 and there is no mention of a penalty.
Suncorp was caught defrauding the general public to the tune of $17,200,000 and there is no mention of a penalty although they appear to have paid out $50,000 (tax deductible of course) to hide their bad breath.
ASIC is certainly punishing the rogues in the industry.
Ok so, these life/disability policies only covered the pay out value and monthly repayment value of the car loan. How is this different to the junk insurance policies sold by the banks and lenders (Mortgage Protection). Policies which only cover the mortgage and repayments. Time to get the banks to repay their customers for flogging super expensive junk insurance policies which are also of no benefit to the consumer. These policies are sold in addition to any existing personal insurances the clients have in super or personally owned.