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Suncorp's AAMI and GIO fined for breaches of internal review timeframes

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The New South Wales State Insurance Regulatory Authority (SIRA) has recently imposed a fine of $100,000 on Suncorp's compulsory third party (CTP) brands AAMI and GIO for failing to meet their internal review timeline obligations.

This marks the first time that a civil penalty has been imposed on CTP insurers under the Motor Accident Injuries Act.

According to SIRA, the fines stem from breaches of AAMI and GIO's internal review timeframes between April 1, 2018 and August 31, 2020. The regulator began investigations in response to complaints about delays that customers were experiencing when seeking internal reviews. Despite issuing letters of censure to AAMI and GIO, SIRA found further breaches during their monthly performance monitoring of internal reviews in September 2020.

As a result, SIRA launched a further investigation into the ongoing issues between April 2018 and August 2020, identifying breaches and contraventions of the Act, the Motor Accident Guidelines, and their license conditions. Show cause notices were issued to the insurers in May 2022, leading to the decision to impose a civil penalty of $50,000 each for AAMI and GIO. The Act provides for fines of up to $110,000.

In determining the appropriate penalty, SIRA took into consideration the experience of customers, the acknowledgement by AAI Limited of their conduct, the significant efforts made to address the backlog of internal reviews and communicate options to customers, and the development and implementation of a remediation plan. The regulator has stated that they will continue to closely monitor the performance and compliance of the insurers.

This news serves as a reminder of the importance of timely and efficient internal reviews for insurers, as well as the need for compliance with regulatory guidelines. Suncorp's CTP brands, AAMI and GIO, will have to pay close attention to their internal processes in the future to avoid similar penalties.

Published:Friday, 27th Jan 2023
Author: Paige Estritori
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Please Note: If this information affects you, seek advice from a licensed professional.

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Knowledgebase

Term Life Insurance:
A life insurance that provides a cover for a specific period of time - usually one to five years or until the insured reaches age 65 or 70.

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