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Suncorp prepares to defend add-on class action

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Suncorp says it “intends to defend” an add-on insurance class action that has been launched against it by Maurice Blackburn.

The insurer declined to provide additional comments about the legal action beyond those made in a brief statement last week to the Australian Securities Exchange, where it confirmed receiving a representative proceeding filed in the Supreme Court of Victoria.

Suncorp says the litigation action against its AAI subsidiary relates to the sale of add-on insurance through MTA Insurance.

AAI acquired the MTA Insurance business on August 29 2014 and on July 1 2015 it was formally transferred to AAI Limited under the Insurance Act 1973.

Maurice Blackburn commenced the class action on March 30, according to details on its website. The law firm, through a spokesman, says it is not commenting further on the lawsuit, which follows a similar action it launched against Allianz in November.

The legal action against AAI and Asteron Life & Superannuation Limited - formerly Suncorp Life & Superannuation Limited - concerns insurance that was sold with, or added onto, loans for the purchase or lease of vehicles at car dealerships.

“AAI is responsible for the add-on insurance contracts issued by [MTA Insurance] prior to around July 1 2015,” the Maurice Blackburn website says. “The class action therefore alleges that AAI is liable for [MTA Insurance’s] contraventions [as] outlined.”

The class action alleges that AAI, MTA Insurance and Suncorp Life & Superannuation Limited gave “personal advice” to consumers and breached various obligations in relation to the giving of that advice.

It also claims they “engaged in misleading or deceptive conduct and made false or misleading representations”.

Their conduct had “wrongly induced consumers to buy the add-on insurance” or they “knew or should have known that consumers who purchased add-on insurance did so under a mistaken belief,” Maurice Blackburn says.

Suncorp was ordered to refund $17.2 million, with interest, to 41,428 customers who bought add-on products from MTA Insurance under a remediation plan overseen by the Australian Securities and Investments Commission (ASIC).

The ASIC remediation plan was announced in 2018 after the corporate regulator found that MTA Guaranteed Asset Protection products sold between 2009 and 2017 provided little or no value to customers.

For MTA Consumer Credit Insurance add-ons, ASIC found the cover was sold to young people who were unlikely to need it if they had no dependents.