RACQ boss apologises over insurance bungle as ASIC sues
RACQ’s boss has apologised after the corporate watchdog launched Federal Court action over claims the insurer misstated premiums on more than 570,000 insurance renewals.
The Royal Automobile Club of Queensland has apologised to members in the wake of the corporate regulator suing the organisation over allegedly misstating premiums on hundreds of thousands of insurance renewal notices.
The Australian Securities and Investments Commission has taken the allegations to the Federal Court claiming that the misstating meant that for the next year of coverage the premiums actually appeared smaller.
The regulator also alleged it had been occurring since 2019 when annual price comparisons were introduced in 2019 but the RACQ failed to stop it.
RACQ managing director and Group CEO David Carter told the mutual organisation’s AGM in Brisbane on Tuesday that their investigation – which they shared with ASIC – showed there was “no bad intent” or there was evidence that it was done to benefit the organisation.
However, Mr Carter said the limitations of the comparison price shown should have been explained on the renewal notice.
“Member and staff feedback was provided at or around the time of its introduction, but steps weren’t taken to better explain this,” he said.
“This matter has no bearing on the way we calculated premiums, and I want to assure
you, the premium you paid was correct.
“To you, and all our members – I’m sorry. This matter is certainly not in line with our high standards or the experience we strive to offer.”
ASIC alleges RACQ insurance made misleading representations on 573,407 occasions, between September 2019 and December last year.”
Mr Carter said at the time, RACQ chose to display the price that had been offered at the last renewal. He said for most policyholders, this would have been the price they had paid.
“However, where members made changes to their policy at renewal or during the year, those changes were not reflected in their comparison price shown in the following year’s renewal notice.” he said.
“The limitations of the comparison price shown should have been explained on the renewal notice.
“In November last year the notices were brought to my attention. We promptly self-reported that the way we were presenting the comparison had the potential to be misleading.”
Mr Carter said in addition to advising ASIC, they commenced a review and took steps to provide further clarification in their communications.
The RACQ also updated their system and renewal notices to make the annual comparison price accurate for more people and the remaining limitations clearer.
IAG completed the acquisition of the RACQ insurance underwriting business in September 2025.
Mr Carter said the RACQ has worked over the past few years through its Risk Transformation Program to uplift risk management practices, processes and capabilities.
“We will work with the regulator to finalise the renewal notice matter, and we will continue to be open and transparent through this process – that is my commitment to you,” he said.
“We have spoken publicly about the need to improve our complaints management processes, and this area continues to be a key focus for us. We are leveraging technology to monitor and analyse member complaints, enabling us to detect emerging issues, trends and respond more quickly.
“This work, combined with the successful transition of our insurance business to IAG, gives us confidence that our insurance operations will continue to improve.”
The action by the financial regulator was the second action in two years against RACQ after the Federal Court ordered it to pay a $10m penalty in 2023 for misleading customers about pricing discounts available.
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