Australia’s largest insurance company has been hit with the largest-ever penalty imposed by the courts against an insurer for failing to give promised discounts to NRMA customers.
The Federal Court has ordered Insurance Australia Limited to pay $40 million (US$26.4 million) after finding the company, wholly owned by ASX-listed Insurance Australia Group, made false or misleading representations to more than 600,000 customers between March 2014 and September 2019.
IAL promised customers loyalty and bonus discounts on their NRMA-branded motor, home, boat, and caravan insurance renewals but failed to follow through.
The insurer used a specific pricing algorithm that ensured customers’ insurance premiums did not fall below a certain price point, Australian Security and Investment Commission deputy chair Sarah Court said….