QBE insurance has announced it will “proactively” refund up to $15.9m to more than 35,000 add on insurance customers
QBE insurance has announced it will “proactively” refund up to $15.9m to more than 35,000 add on insurance customers who paid for insurance bought through car dealerships where little or no benefit was provided. This is a result of ASIC’s ongoing review of the motor vehicle add on insurance market.
In terms of Eric Insurance (Eric), it remains in regular contact with ASIC on a range of issues including the industry review. However, as detailed in the initial research, Eric is unable to ascertain any impact on the company until ASIC completes its ongoing review.
Eric advises that it has undertaken its own analysis approach, which was signed off as reasonable by Ernst & Young that indicated no material issue. Consequently, the company has instituted an ongoing remediation program that has reviewed exposure retrospectively to February 2014 (the date that ASIC first put the industry on notice). The program will continue until a new system is launched to tackle ASIC’s concerns (expected 2H18).
From a financial perspective, to the extent that a policy is cancelled back to inception, Eric is able to claw back the commission where the dealer is still operating with Eric. The totals involved to date have been immaterial and will be included in the FY17 results.
Eric advises that until ASIC decides whether it views this approach to be sufficient, the company cannot be certain it has covered off its total exposure.
For more information see company updates here.