The corporate regulator has taken Federal Court action against RACQ Insurance alleging renewal documents provided false or misleading premium comparisons. 

The Australian Securities and Investments Commission says the insurer sent more than 570,000 renewal documents between September 2019 and December 2024 with the misleading comparisons, despite customer complaints. 

In many cases, the “last period premium” shown was higher than customers had paid or were paying after negotiating discounts or making changes to their policies, leading to a distorted view of how much their premium was actually increasing, ASIC alleges. 

RACQ apologised today to its members, saying it has updated its system and processes and will work with ASIC to finalise the matter.

ASIC alleges RACQ Insurance knew the “last period premium” on its documents was misleading because the insurer started receiving complaints two days after it began the disclosure practice. 

“RACQ didn’t just make it difficult to compare apples with apples; we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium,” ASIC deputy chair Sarah Court said. 

“We are concerned this conduct deprived Australians of the opportunity to compare their renewal information against other insurers to find the best value for money.” 

The disclosure was included on renewal documents for many different types of cover including home and contents, car, caravan, boat and pet insurance. 

Ms Court says failures by insurers to deal fairly and in good faith with customers are an enforcement priority for ASIC. 

“Customers should be able to look at renewal documents sent by their insurer and take them at face value,” she said. 

RACQ Insurance has since been acquired by IAG, with the deal completed on September 1. 

An RACQ statement says the insurer takes its obligations and responsibilities seriously.

“Late last year, we self-reported a matter to ASIC regarding the communication of the annual comparison price on renewal notices for RACQ Insurance policies following a media enquiry,” the statement said.

“Since then, we have been working openly and transparently with the regulator while also conducting our own internal review covering the period since the comparison price was introduced in 2019.

“We also took steps to provide further clarification in our communications to explain the annual comparison between last year’s premium and what is being offered for the upcoming period. 

“We then updated our system and renewal policies to make this even clearer.

“We are disappointed this has happened and apologise to our members as this is not in keeping with our high standards or the experience we strive to offer.”