Insurance Australia Group (IAG) will make changes
to advertising materials and policy documents for comprehensive car
insurance in response to concerns raised by ASIC.
IAG has clarified the use of the words ‘Maximum No
Claim Discount For Life’ in advertising materials and policy documents
for comprehensive car insurance.
ASIC was concerned that IAG’s advertisements and
other disclosure documents were misleading or deceptive, or were likely
to mislead or deceive. NRMA Insurance, SGIC and SGIO have advertised
Maximum No Claim Discount For Life in many of its marketing campaigns.
IAG has agreed to take a number of steps including
making significant changes to their documentation, publishing
advertisements in major newspapers and setting up a dedicated telephone
line to handle enquiries.
The Maximum No Claim Discount For Life insurance
policies are issued by Insurance Australia Limited under the following
brand names:
- NRMA Insurance in New South Wales, Queensland, Tasmania and the ACT;
- SGIC in South Australia; and
- SGIO in Western Australia.
Maximum No Claim Discount For Life is a policy
feature available to many customers of NRMA Insurance, SGIC and SGIO.
It seeks to reward eligible customers by allowing them to retain the
maximum no claim discount offered, even if the customer makes an
at-fault claim. No claim discounts up to 65 per cent are offered.
ASIC’s concerns
ASIC was concerned that NRMA Insurance’s,
SGIC’s and SGIO’s advertising materials and product disclosure
statements did not make it clear that the premium payable by customers
who qualify for Maximum No Claim Discount For Life policies are
affected by the claims and incident history of the drivers of the
insured vehicle. That is, although customers retained the 65 per cent
discount for the duration of their insurance, claims and incidents
affect the base premium calculation and could lead to an increase in
the premium. Any change in the base premium applies from the time of
the next policy renewal.
ASIC considered that people with a Maximum No Claim
Discount For Life policy would not expect to have an at-fault claim
considered in the calculation of a base premium.
