The corporate regulator has launched civil penalty proceedings against Hollard Insurance over the handling of a storm-damage claim it says took nearly three and a half years to resolve.
In filings to the Federal Court, the Australian Securities and Investments Commission alleges Hollard Insurance Partners Limited breached the duty of utmost good faith in managing a home building and contents claim lodged by a couple from regional Victoria on 31 October 2021, two days after a major storm damaged their roof.
ASIC says Hollard initially accepted the claim but repeatedly delayed decisions about repairs, took more than nine months to arrange an inspection by a structural engineer, and was slow to provide temporary accommodation. The claim was ultimately rejected in late April 2023, with the insurer relying on a non‑expert opinion over earlier expert reports about the cause of the damage. The couple rejected a modest cash settlement and complained to the Australian Financial Complaints Authority.
ASIC alleges that the combination of delays, poor communication and disregard of expert advice caused unnecessary and prolonged harm, breaching Hollard’s duty of good faith implied by section 13 of the Insurance Contracts Act. It is seeking declarations and a civil penalty.
ASIC Deputy Chair Sarah Court said, ‘In the end, because of the excessive delays by Hollard and the failure to undertake make-safe works, the home has become so riddled with moisture, mould and decay that it is uninhabitable and now needs to be demolished and rebuilt.
‘The egregious delay highlights ASIC’s concern about the significant rise in general insurance complaints reported to AFCA since the 2022 floods, particularly those involving claim delays. We are taking this case to send a clear message that delays of this magnitude are not acceptable and, in our view, are unlawful. The consequences of Hollard’s actions have caused significant harm to the policyholders who remain without their own home three and a half years later.’
The matter is listed for a case management hearing on 19 September 2025.
Hollard Insurance Partners Limited, formerly Commonwealth Insurance Limited, is Australia’s fifth‑largest general insurer, with a 4.4% market share, estimated FY24 revenue of about $2.308 billion and more than 1,600 staff. Its parent, Hollard Holdings Australia Pty Ltd, completed the purchase of Commonwealth Insurance Limited on 30 September 2022.
Since 1 January 2022, insurers providing claims handling and settling services have been required under their Australian Financial Services licence to provide those services efficiently, honestly and fairly. Insurers handling claims were already obliged to act consistently with the duty of utmost good faith.
The action forms part of ASIC’s ongoing scrutiny of home insurance claims handling. In December 2021, ASIC reported findings from its review of claims stemming from the 2019–20 Black Summer bushfires, and in August 2023 its Report 768, Navigating the storm: ASIC’s review of home insurance claims, called on general insurers to bolster claims handling practices and resourcing across five key areas. ASIC says it has been monitoring responses to those findings and will publish an update shortly.
ASIC’s originating process and concise statement have been filed with the Court. Hollard has been contacted for comment.
