RACQ Insurance has defended its renewal premium disclosures in response to Federal Court action by the corporate regulator.

The Australian Securities and Investments Commission alleges comparison figures were false or misleading in cases where the displayed year-earlier premium was not the actual sum paid due to later agreed changes. This could underplay the size of a price increase, it says.

Last year, ASIC said the insurer sent more than 570,000 renewal documents with misleading comparisons between September 2019 and December 2024.

In a defence filing, RACQ says customers that initiated policy changes would receive documentation outlining the revised arrangements.

When a change was made before the policy starting or before its final 32 days, the “last period premium” shown on the later renewal was not the actual sum paid, as it did not include the adjustments.

But the insurer says the policyholder was aware of the original quotation, changes made and premium impacts.

“An ordinary and reasonable policyholder who received a post-change affected renewal document would have understood the ‘last period premium’ amount in the context of the matters pleaded,” the court filing obtained by insuranceNEWS.com.au says.

RACQ says it changed documentation under a program starting in February 2019 because it understood the Insurance Council of Australia was planning to introduce comparison requirements to the code of practice.

As part of the program, RACQ says it consulted with ICA in relation to compliance with anticipated changes.

The insurer included “last period premium” and “this period premium” amounts in renewal certificates of insurance and reminders “in a bona fide attempt” to meet comparison requirements it anticipated would be in the code, the defence says.

RACQ says that in about 29% of cases, stated premiums displayed without adjustments were below the amount actually paid.

ASIC deputy chair Sarah Court said last year that customers should be able to take renewal documents at face value.

“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,” she said.

RACQ Insurance, which has since been acquired by IAG, apologised to members last year and said it had self-reported the matter following a media inquiry and updated its system and renewal policies.