ASIC has issued two infringement notices totalling $37,560 to insurance company Zurich Australia Limited for allegedly making false or misleading statements to two policyholders regarding their entitlement to benefit payments.
In May 2024, Zurich declined two trauma insurance claims advising the policyholders that their particular medical conditions were excluded, and no benefit was payable.
ASIC alleges that these statements were false or misleading as the policy terms applicable to the trauma cover held by the policyholders did not exclude their medical conditions and they were entitled to a benefit payment.
Zurich discovered these errors following a quality assurance review, and subsequently remediated the policyholders, paying them their benefit entitlements, with interest. Zurich also reported the matter to ASIC.
Zurich paid the infringement notices on 8 May 2025.
Insurance claims handling was a 2024 enforcement priority and failures by insurers to deal fairly and in good faith with customers is a 2025 enforcement priority.
ASIC seeks to enhance public confidence in the insurance industry by encouraging Zurich and other life insurers to uplift their claims handling processes and to ensure consumers are not misled about their rights or entitlements under their insurance policies. For example, where the handling of a claim involves a legacy product or policy enhancements passed back to existing policyholders, insurers should ensure claims staff have an awareness of, and ready access to, the applicable policy terms and conditions.
Background
Zurich provides life insurance products such as life cover, TPD, income protection and trauma cover.
Under section 12GX of the Australian Securities and Investments Commission Act 2001 (Cth), ASIC may give an infringement notice to a person if ASIC believes on reasonable grounds that the person has contravened an infringement notice provision.
Issuing infringement notices provides a proportionate and prompt regulatory response to the alleged contravention and is likely to deter credit providers from engaging in similar conduct in the future.
Payment of an infringement notice is not an admission of liability.
The specific reasons for ASIC's concerns are set out in the two infringement notices which have been published on the infringement notices register.
For consumers who have questions about insurance, ASIC's Moneymart website has independent information regarding how insurance works and how to make an insurance claim.
