Suncorp hit by insurance class action

The suit alleges Suncorp sold thousands of “add-on” car policies, which delivered little or no value, over almost 10 years.

Suncorp is facing potential further payouts arising from “add-on” car insurance sold by its subsidiary MTA after Maurice Blackburn lobbed a class action on Thursday.

In a statement to the market Suncorp confirmed the suit and committed to defending it.

Suncorp has already been forced to pay in refunds and costs $17.2m for the sale of the insurance after regulatory action in 2018.

The new Victorian Supreme Court challenge comes after similar class actions were filed against other insurers in recent years over the sale of “junk” add-on insurance.

These insurance products were the target of scrutiny in the Hayne royal commission, which revealed Allianz had sold more than 2m insurance policies that contained false and misleading statements.

Maurice Blackburn has had a string of wins in class actions targeting insurers which sold policies to consumers which delivered little to no value.

In December last year Swan Insurance was forced to pay $138m for its role in a similar add-on insurance.

Maurice Blackburn received $10m in costs and expenses for their actions against Swan.

Swan had been found to have sold the policies to people and businesses between 1 January 2008 and 1 August 2017.

Maurice Blackburn launched a similar class action against Allianz in November last year

targeting similar “junk insurance” policies

It is understood Maurice Blackburn will likely take a similar approach in its attack on Suncorp over the “junk insurance” policies it sold through MTA.

The Australian Securities and Investments Commission found MTA had sold the insurance between 2009 and 2017 to 41,428 customers.

Suncorp acquired MTA insurance in 2014.

ASIC found cover sold under the MTA policies was often duplicated vehicle cover sold to customers through car insurance policies.

The regulator also found many customers were often sold policies on a far more expensive level than was needed and did not receive rebates from MTA when they paid out loans early, even though cover under these policies had ended.

Many banks and insurers have since walked away from selling add-on policies in the wake of recent regulatory scrutiny and class actions but several notable exceptions continue to sell policies through one form or another.