Australia regulator sues IAG unit for failing to honour discount promises

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Oct 15 (Businesshala) – Australia’s corporate regulator on Friday launched civil proceedings against an entity of Insurance Australia Group for failing to pay a rebate of $60 million ($44.51 million) to nearly 600,000 customers.

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The Australian Securities and Investments Commission (ASIC) alleged that Insurance Australia Limited (IAL) – IAG’s home, motor and homeowners insurance arm – failed to implement the discounts offered to certain customers on renewal of their home and motor insurance policies. has been

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ASIC said it affected insurance renewals related to 705,000 different policies between March 2014 and November 2019.

Shares of IAG fell nearly 4% following the news.

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The regulator said the legal proceedings come on the back of industry-wide failures that have caused insurers to pay more than $400 million to more than 2 million customers since 2018.

“ASIC is asking general insurance companies, including IAL, to offer full discounts to customers,” said ASIC deputy chairperson Sarah Court.

In a separate statement, IAG, one of the country’s top insurers, acknowledged the action by ASIC and said the company had self-reported the issue to the regulator during its 2019 review.

The general insurer also said that over 80% of affected customers have been compensated and it is still working with ASIC through a treatment program.

$1 = 1.3481 Australian Dollar Reporting by Savita Mishra in Bengaluru; Ramakrishnan M.

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