RACQ member refunds estimated at around $200 million
22 August 2022
RACQ says it expects to refund $200-220 million to members following a review process and after self-reporting to the Australian Securities and Investments Commission (ASIC).
The insurer said in June that it had reported a breach to ASIC over some product disclosure statement wordings that were inadequate to describe how premiums were calculated for optional covers.
RACQ says, with support from KPMG, a diligent review process also found other matters where members didn’t receive the full benefit of discounts.
CEO David Carter says the majority of the refunds relate to the optional covers’ disclosure matter and will date back to March 2015.
“Up to 500,000 members will receive refunds because our disclosures were incorrect,” he said. “We remain confident the premiums were calculated and charged to members as intended.”
RACQ will also issue refunds to members who have not received the discounts they were entitled to, and those refunds may date back to 2013. Refunds will begin in September, but may take some time to be completed given the complexity of the matters.
The remediation program will be independently monitored by an external party, RACQ says.
“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 for our people. 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.”
The $200-220 million refund total, across all pricing promises matters, includes duties, taxes and interest.