RACQ to repay members up to $220m over insurance breach

Motoring giant RACQ will have to repay half a million of its members a total of up to $220m after admitting a disclosure breach in relation to its insurance policies.

RACQ will have to repay half a million of its members a total of up to $220m after they did not get promised discounts on their insurance premiums.

The Brisbane-based motoring and insurance group said that it had self-reported a regulatory breach to ASIC after finding some of the wording in its product disclosure statements “was inadequate in describing how several of our discounts were applied to premiums.”

RACQ chief executive David Carter said the total refund to members was estimated to be in the range of $200-$220m, including applicable duties, taxes and interest.

Mr Carter said the majority of the refunds related to the optional covers’ disclosure in its insurance policies and dated back to March 2015.

“Up to 500,000 members will receive refunds because our disclosures were incorrect,” Mr Carter said. “We remain confident the premiums were calculated and charged to members as intended.”

RACQ will issues refunds to half a million members

RACQ also will issue refunds to those members who have not received the discounts they were entitled to, and those refunds may date back to 2013.

He said refunds would begin in September but given the complexity of the matter the entire remediation program would take some time to complete.

The RACQ said the remediation program would be independently monitored by an external party. “A significant investment is underway in RACQ’s systems and processes to deliver improved outcomes for our members, stronger risk management, simplified products, and easier processes. Our goal is to ensure this never happens again,” Mr Carter said.

“On behalf of RACQ, the board and I apologise once again for these regrettable errors as they are not in keeping with our high standards and values.”

Mr Carter said RACQ remained financially strong to deliver on its commitments and support its ongoing operations to serve members.

Originally published as RACQ to repay members up to $220m over insurance breach