Refunds of almost $16 million will be given to customers of QBE after the financial regulator concluded the insurance group sold products that provided "little or no benefit".
The Australian Securities and Investment Commission (ASIC) has ordered QBE
to refund more than 35,000 customers who were sold add-on insurance through
car dealerships from 2011–2017.
As much as $15.9m is expected to be refunded to people who purchased
QBE consumer credit insurance (CCI) and guaranteed asset protection (GAP),
making it the largest amount refunded by an add-on insurance provider to
The average amount refunded will be approximately $400, but some could be
as high as $3000. The refunds will include interest.
ASIC expects to secure more refunds from providers where the insurance sold
offered little or no benefit, says Peter Kell, deputy chair of ASIC.
"This large-scale remediation by QBE is a direct result of our 2016 add-on
insurance review, which uncovered the widespread sale of insurance with
little or no value to consumers," he says.
"We put all add-on insurers on notice following our review…All add-on
insurers should review the sale of policies and refund consumers who were
sold policies they didn't need."
ASIC found CCI and GAP insurance were often sold to people who did not need
them, mainly because they had coverage from their comprehensive car
insurance, did not owe much debt on their car, or did not need cover.
The financial regulator reviewed add-on insurance sold through car dealers
in 2016. It concluded in its reports that "the insurance is expensive, of
poor value and provides consumers very little or no benefit".
QBE will write to all affected customers and ask them to confirm they want
a refund, rather than keeping the policy. People can also find out if
they are owed a refund from QBE by visiting ASIC's MoneySmart website.