The Australian Securities and Investments Commission is reviewing the “accuracy and transparency” of motor insurance pricing.

The surveillance exercise will cover a range of brands offered by some of the largest insurers, accounting for about two-thirds of the car insurance market.

“ASIC is examining how insurers communicate about insurance premiums, with an eye to understanding whether they comply with their disclosure requirements under law,” a spokesperson told insuranceNEWS.com.au.

“We are seeking to understand and identify industry practices. This review has been in part triggered by an increase in internal and external complaints data regarding premiums.”

ASIC flagged a focus on premium accuracy and transparency in its updated corporate plan from this year to 2028-29.

Until now, the corporate regulator has largely scrutinised home insurance, leading to significant court-imposed penalties in the past few years.

Nine News quoted ASIC commissioner Alan Kirkland as saying: “People are unhappy with the premiums they’ve been quoted and the increases they’re seeing. And they’re also really unhappy with how those increases are being explained, and that’s why we’ve decided to look into this issue.”

The broadcaster cited an example in which a renewal notice did not state a discounted premium charged the previous year, instead detailing the original price.

“That’s misleading, and could be in breach of the law,” Mr Kirkland said. “They’re understating the premium increase, and that means you’re less likely to be prompted to shop around.”

The industry’s code monitor has made compliance with pricing transparency rules one of its priorities this financial year, in response to concerns that insurers are not providing clear explanations for premium increases.

The code states insurers must provide “a comparison between this year and last year’s premium and explain … how it is calculated” in renewal notices to home and motor policyholders.

The Insurance Council of Australia says the general insurance industry is "committed to high standards of transparency and delivering better outcomes for consumers".

"We note ASIC’s upcoming review into premium accuracy and transparency and look forward to working constructively with ASIC,” a spokesperson told insuranceNEWS.com.au.

From the latest Insurance News magazine: Why consumer groups will be "casting an eagle eye" over insurers' code revamp