Suncorp and Allianz will be repaying $63 million to customers who purchased through dealerships.
Allianz and Suncorp are required to pay an auto insurance refund total of $63 million to customers who purchased coverage through their car dealers. The repayment is a part of a crackdown from a corporate watchdog worth $120 million regarding financing and insurance add-ons at dealerships.
An investigation was conducted regarding many questionable practices such as car dealer sales tactics.
Australian Securities and Investments Commission (ASIC) senior exec, Michael Saadat, is responsible for overseeing insurance companies, banks and credit issuers. Last year in June, Saadat said he was compelled to provide the watchdog organization “granular data” concerning sales tactics, produce valuation and commission structures regarding insurance sold as an add-on product through car dealerships.
According to ASIC data, Suncorp will be sending the reimbursements to 41,428 customers who purchased the add-on insurance through their car dealers. That insurer will be paying a total of $17.2 million to its customers. The reason is that the add-on coverage provided was deemed to provide policyholders with “little or no value.” That policy was written by MTA Insurance, an insurer owned by Suncorp from 2009 through last year.
The auto insurance refund is meant to reimburse customers who were sold coverage they already had.
The MTA Guaranteed Asset Protection auto insurance policies were examined by the ASIC which determined that the coverage was “unnecessary as it duplicated replacement vehicle cover held by customers under their comprehensive car insurance policies.”
Equally, Allianz Australia Insurance will send 68,000 customers a total of $45.6 million for the add-on policies it sold through dealerships from December 1, 2010 through November 30 last year. The ASIC said that the policy sold by that insurer was similar in that it was unnecessary and duplicated coverage a driver would already have.
The ASIC crackdown has placed the spotlight on three of the biggest insurance companies in the country. Beyond the most recent auto insurance refund requirement, another penalty was issued in December for IAG brand Swann Insurance, when it had to send $39 million of its premiums back to customers.