QBE to refund $15.9 million to its customers
QBE Insurance refunding add-on insurance premiums to over 35,000 customers.
QBE Insurance (Australia) Ltd will return $15.9 million premiums to its customers after ASIC raised concerns over add-on insurance products.
The action will see more than 35,000 QBE customers refunded roughly $15.9 million worth of premiums for QBE Guaranteed Asset Protection (GAP) and Consumer Credit Insurance (CCI) products, which were sold to customers through car dealerships between 2011 and 2017.
"This large-scale remediation by QBE is a direct result of our 2016 add-on insurance review, which uncovered the wide-spread sale of insurance with little or no value to consumers," deputy chair Peter Kell said.
In regards to the GAP cover ASIC found that these products returned little to no benefit to customers as these policies were duplicates of cover already held by the consumer, left the consumer overinsured or were sold to consumers who were unlikely to have a gap between the loan balance and the insured value of the car.
ASIC also found that QBE CCI was sold to younger people who were unlikely to need the cover as they had no dependants.
"Insurance must meet the needs of the consumer first and foremost. All add-on insurers should review the sale of policies and refund consumers who were sold policies they didn't need," said Kell.
QBE will make restitution in a number of way including refunding premiums to those who were unlikely to need gap cover, refund the cost of the life or trauma insurance element of CCI premiums to under 25s and make a $50,000 payment to Financial Literacy Australia.