IAG faces class action lawsuitApril 12 2019 by InsuranceAsia News Staff
A class action has been filed against Insurance Australia Group and its former motor subsidiary Swann Insurance.
The lawsuit alleges that Swann participated in “misleading and deceptive conduct” in relation to the selling of add-on insurance. The litigation is being conducted by Johnson Winter & Slattery in cooperation with Bannister Law.
IAG issued a statement on April 11 to the Australian Securities Exchange confirming that it is aware of the proceedings.
Charles Bannister, principal at Bannister Law, explained: “The claim is seeking compensation and relates to misleading and deceptive conduct in relation to the way the insurance products were presented and sold in car dealerships to purchasers of motor vehicles and motor cycles between January 1 2008 to August 1 2017.”
The claim is being filed on behalf of customer Jones Asirifi-Otche and other customers sold policies between the dates could also join the suit.
IAG sold its Swann Insurance motor vehicle distribution rights in August 2016 and ended sales through motorcycle dealers in October 2017.
The insurer has already refunded more than A$22 million (US$15.7 million) to more than 38,000 customers.
The recent Hayne Commission report into financial services in Australia was scathing over the sale of add-ons. Hayne recommended heavy-handed selling of insurance products to be banned, while the report has recommend imposing a cap on the commission that can be paid to car sellers for add-on insurance products.
Hayne also recommended retaining the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority but instead have them overseen by a new independent authority that would assess the two regulators to ensure they are carrying out their responsibilities.
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