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One of Queensland's largest insurers sent thousands of customers over half a million renewal documents with misleading comparison pricing for more than five years despite customer complaints, ASIC alleges in new proceedings commenced in the Federal Court.

Between September 2019 and December 2024, RACQ Insurance Limited (RACQ) sent more than 570,000 renewal documents to customers containing representations about a ‘last period premium’ amount that ASIC alleges were false or misleading.

ASIC alleges that, in many cases, the ‘last period premium’ amount was higher than what customers had paid (or were paying) after negotiating discounts or making a change to their policy that affected the premium, leading to a distorted view of how much their premium was actually increasing.

ASIC deputy chair Sarah Court said failures by insurers to deal fairly and in good faith with customers was an enforcement priority for ASIC.

“During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents,” she said.

“RACQ didn’t just make it difficult to compare apples with apples, we consider customers were potentially left paying more because their insurance renewal documents gave them a distorted picture of the change in their premium.”

For example, an RACQ customer received a renewal notice showing their ‘last period premium’ was $6,930.55 and their new premium was $7,033.57: a 1.5 per cent increase. However, the customer had actually paid a much lower $5,024.18 premium, which meant RACQ was hiking their renewal premium by 40 per cent.

“Customers should be able to look at renewal documents sent by their insurer and take them at face value,” Court said.

“We are concerned this conduct deprived Australians of the opportunity to compare their renewal information against other insurers to find the best value for money.

“RACQ claims it was providing ‘pricing transparency’ to members and a ‘more open, fair and honest member experience’, but we allege their misleading comparison pricing did the exact opposite,” Court said.

ASIC alleges RACQ knew the ‘last period premium’ in its renewal documents was misleading customers because the insurer started receiving complaints just two days after commencing the practice.

“Not only do we allege RACQ broke the law, but it was also put on notice by its customers, who complained that the ‘last period premium’ amount was misleading, yet RACQ did little about it for more than five years,” Court said.

ASIC alleges the misleading ‘last period premium’ was included on renewal documents for many different types of cover including home and contents, car, caravan, boat and pet insurance.

ASIC will seek declarations, civil penalties and publicity orders from the Court.

ASIC alleges that RACQ contravened section 12DB of the ASIC Act.

In 2023, the Federal Court ordered RACQ to pay a $10 million penalty for potentially misleading customers in its product disclosure statements about the pricing discounts available for certain types of insurance cover (23-323MR). RACQ admitted the contraventions in that matter and the parties jointly submitted that the penalty sought by ASIC was appropriate.

As part of its 2025 enforcement priorities, ASIC has taken action against several insurers who failed to deal fairly and in good faith with their customers.

In February 2025, ASIC secured a conviction and fine in the NSW Supreme Court against Allianz Australia Insurance Limited and AWP Australia Pty Ltd totalling $16.8 million. In May 2025, the Federal Court ordered HCF Life Insurance Company Pty Ltd to pay a penalty of $750,000 over a pre-existing condition term in certain HCF Life Insurance policies, which was liable to mislead the public.

In its 2025-2026 Corporate Plan, ASIC also revealed it will examine the accuracy and transparency of general insurers’ disclosures about premiums and work to better understand consumer experiences.

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