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10 June 2020
The Australian Competition and Consumer Commission (ACCC) will allow insurers to continue co-ordinating on COVID-19 SME assistance measures until the end of the year.
The draft authorisation, which applies to Suncorp, Allianz, QBE and other insurers or brokers who have notified the ACCC, follows an April 2 interim decision clearing measures assisting policyholders whose premiums were due before June 30.
“There is clearly a need for these relief measures to continue as many small and medium-sized Australian businesses continue to experience unprecedented financial hardship due to the COVID-19 pandemic,” ACCC Commissioner Stephen Ridgeway said today.
“However, the ACCC will continue to monitor this authorisation to ensure it does not result in unintended consequences impacting competition in the insurance industry.”
The regulator will seek further feedback on today’s draft decision before deciding whether a final authorisation will be granted.
“We also note there is nothing to stop individual insurers from offering more relief than is agreed under the authorisation or from continuing to offer relief to policyholders after the authorisation has expired,” Mr Ridgeway said.
Suncorp, Allianz and QBE initially announced support arrangements for SMEs in early April, after seeking ACCC clearance, as lockdowns introduced to contain the virus took a toll on businesses around Australia.
The measures included deferring premium payments for up to six months and refunding unused premiums on any cancelled policies without being charged administration or cancellation fees.
Continuity of cover has been provided where premises are vacant due to COVID-19 and payment times to SME suppliers and contractors involving in servicing claims were reduced to no more than 15 days.
Suncorp said in a submission supporting the ACCC decision that most of the measures had worked as expected although there had been a more limited uptake of the six-month premium deferrals offer.
IAG also released similar assistance measures in late March that extended for varying periods.