ASIC: QBE refunds $15.9 million in add-on insurance premiums

The Australian Securities and Investments Commission (ASIC) announced that QBE Insurance (Australia) Ltd (QBE) will refund more than 35,000 add-on insurance customers up to $15.9 million they paid for insurance bought through car dealerships where the insurance provided little or no benefit.

The insurance products were QBE Guaranteed Asset Protection (GAP) and Consumer Credit Insurance (CCI) sold through car dealerships across Australia between 2011 and 2017.

ASIC found that the QBE GAP insurance:

  • was sold where there was unlikely to be a gap between the insured value of the car and the loan balance, for example because the customer paid a large deposit
  • duplicated existing cover held by consumers
  • provided consumers with more insurance than they needed

ASIC found that QBE CCI insurance was sold to young people who had no dependents and who were unlikely to need the cover.

In response to ASIC's concerns, QBE will:

  • proactively refund the premium paid by customers who were unlikely to need GAP insurance, especially where they paid a large deposit
  • proactively refund all GAP insurance customers at least one year's premium because 'new for old' cover under their comprehensive motor insurance would have provided similar cover. Consumers can claim a larger refund if their comprehensive cover provided more than one year of 'new for old' vehicle replacement
  • partially refund customers who were sold more GAP cover than they needed
  • proactively refund customers under 25 years the cost of the life or trauma insurance element of their CCI premium
  • for customers who paid their loan off early and held both GAP and CCI insurance, partially refund the GAP insurance premium from the date the loan was paid off
  • make a $50,000 payment to Financial Literacy Australia.

Together, these refunds, with interest, will amount to approximately $15.9 million.

ASIC recognises QBE's responsiveness, and commitment to resolving our concerns. ASIC is working with other insurers to achieve similar outcomes where similar conduct occurred.

QBE will write to all affected customers and ask them to confirm they want a refund, rather than keeping the policy.

Findlaw

We welcome your feedback

Hi there! We want to make this site as good as it can for you, the user. Please tell us what you would like to do differently and we will do our best to accommodate!

   
Protected by FormShield


 
 
 
We've updated our Privacy Statement, before you continue. please read our new Privacy Statement and familiarise yourself with the terms.
Feedback