ASIC civil penalty Federal Court judgement
News
RACQ acknowledges the Federal Court’s decision today to impose a civil penalty of $10 million plus costs on RACQ Insurance (RACQ) for contraventions of the ASIC Act.
The penalty relates to information contained in RACQ’s insurance Product Disclosure Statements (PDSs) between February 2017 and March 2022 that was liable to mislead the public. The PDSs were misleading in their description as to how policy discounts were to be applied to premiums for optional benefits covers across Home, Motor and Caravan & Trailer products.
Although RACQ had no intention to mislead, it recognises and admits the historical controls it had in place to ensure its PDSs complied with the laws were inadequate.
The proceedings followed RACQ’s self-identification and self-reporting of these matters to ASIC, and the outcome of RACQ’s broader pricing promises review in 2022. The PDSs were revised in March 2022 to address the issues.
Since then, RACQ has processed more than $54 million (as at 30 November 2023) in refunds to eligible members and the refunds are expected to be substantially completed by end of February 2024.
RACQ has apologised for these matters as they are not in keeping with the Club’s high standards and values.
RACQ is simplifying its insurance products and the discounts that it offers members and improving its systems and processes to reduce complexity to ensure this never happens again.
RACQ had anticipated a penalty of this amount and provisioned for this in its FY23 accounts. All costs of the remediation, including the penalty, will be paid from its reserves.
In line with the court order, a Federal Court notice will be posted on the racq.com website.
Although RACQ had no intention to mislead, it recognises and admits the historical controls it had in place to ensure its PDSs complied with the laws were inadequate.
The proceedings followed RACQ’s self-identification and self-reporting of these matters to ASIC, and the outcome of RACQ’s broader pricing promises review in 2022. The PDSs were revised in March 2022 to address the issues.
Since then, RACQ has processed more than $54 million (as at 30 November 2023) in refunds to eligible members and the refunds are expected to be substantially completed by end of February 2024.
RACQ has apologised for these matters as they are not in keeping with the Club’s high standards and values.
RACQ is simplifying its insurance products and the discounts that it offers members and improving its systems and processes to reduce complexity to ensure this never happens again.
RACQ had anticipated a penalty of this amount and provisioned for this in its FY23 accounts. All costs of the remediation, including the penalty, will be paid from its reserves.
In line with the court order, a Federal Court notice will be posted on the racq.com website.