NRMA Insurance to Refund $12 Million Overcharged to Motorists
Thousands of Australian drivers will receive refunds after an insurance blunder led to incorrect premiums.
NRMA Insurance is set to refund over $12 million to approximately 41,564 policyholders due to errors in its risk-rating system that resulted in overcharges for compulsory third-party (CTP) insurance, commonly known as green slips in New South Wales.
The State Insurance Regulatory Authority (SIRA) found that the insurer, a subsidiary of Insurance Australia Group, failed to comply with the Motor Accident Injuries Act 2017, Motor Accident Guidelines, and its insurer license requirements. SIRA imposed eight civil penalties totaling $479,500 on Insurance Australia Limited, trading as NRMA Insurance.
SIRA stated that the green slip issue was one of eight mistakes identified, revealing significant weaknesses in NRMA Insurance's pricing, data, and system controls. These control failures led to incorrect premiums, customer overcharges, and under-refunds. The regulator emphasized that accurate CTP premiums are crucial for protecting motorists and maintaining confidence in the insurance scheme.
An NRMA Insurance spokesman acknowledged SIRA's findings and stated that the oversight stemmed from an outdated system that did not properly update policies when customer details, such as addresses, changed. The company is in the process of transitioning to a new technology platform to prevent future errors. NRMA Insurance has cooperated with SIRA and is working to provide remediation, including refunds with interest, to affected customers.
Beyond the green slip overcharges, SIRA also identified issues with inaccurate tenure information, a lack of cancellation refunds, inconsistencies in fund levy charges, and a failure to apply relationship discounts. The regulator noted that such premium inaccuracies cause direct financial detriment to policyholders, potentially compromising CTP affordability and undermining the scheme's fairness.