The NSW State Insurance Regulatory Authority (SIRA) has fined Suncorp Group general insurer AAI Limited $100,000 – $50,000 each for its brands AAMI and GIO respectively – for failing to meet their obligations under the Motor Accident Injuries Act 2017.
According to SIRA, the fines arose from breaches of AAMI and GIO’s internal review timeframes for the period 1 April 2018 to 31 August 2020.
It is the first time a civil penalty has been imposed on CTP insurers under the act.
SIRA’s investigations began in response to complaints received about delays experienced by customers seeking internal reviews. As a result of these investigations, SIRA issued three letters of censure to AAMI and five to GIO.
“Despite this action, during SIRA’s September 2020 monthly performance monitoring of internal reviews across the CTP scheme, AAI Limited reported further breaches of internal review timeframes for the period July to August 2020,” said SIRA.
The authority began a further investigation into ongoing issues between April 2018 to August 2020, identifying breaches and contraventions of the act, the Motor Accident Guidelines, and their licence conditions.
SIRA issued show-cause notices to the insurers in May 2022, deciding the appropriate regulatory response was the imposition of a civil penalty, under Section 9.10 (1)(a) of the Act, of $50,000 each for AAMI and GIO. The Act provides for fines up to $110,000.
According to SIRA, factors considered in deciding the penalty included the experience of customers, acknowledgement by AAI Limited of its conduct, significant efforts made to address the backlog of internal reviews and communicate options to customers, and the development and implementation of a remediation plan.
SIRA said the regulatory enforcement outcome will form part of AAMI and GIO’s compliance history, and it will continue to closely monitor the insurers’ performance and compliance.