Australia’s corporate regulator has launched Federal Court action against RACQ Insurance Limited, alleging the Queensland-based insurer misled customers for more than five years by using inaccurate comparison pricing in renewal notices.
The Australian Securities and Investments Commission (ASIC) claims that between September 2019 and December 2024, RACQ sent more than 570,000 renewal documents containing representations about a ‘last period premium’ amount that were false or misleading. In many instances, ASIC alleges, the figure shown as the previous premium was higher than what customers actually paid after discounts or policy changes, skewing perceptions of price rises.
ASIC Deputy Chair Sarah Court said failures by insurers to deal fairly and in good faith with customers was an enforcement priority for the regulator.
‘During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents.
‘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,’ the Deputy Chair said.
In one example cited by ASIC, a customer received a renewal showing a ‘last period premium’ of $6,930.55 and a new premium of $7,033.57, implying a 1.5% increase. However, the customer had actually paid $5,024.18, meaning the renewal represented a 40% hike.
‘Customers should be able to look at renewal documents sent by their insurer and take them at face value.
‘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,’ the Deputy Chair said.
ASIC also alleges RACQ knew the ‘last period premium’ presentation was misleading, noting complaints began two days after the practice was introduced. ‘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,’ the Deputy Chair said.
The alleged conduct spans multiple product lines, including home and contents, motor, caravan, boat and pet insurance. ASIC is seeking declarations, civil penalties and publicity orders.
ASIC alleges contraventions of section 12DB of the ASIC Act. In 2023, the Federal Court ordered RACQ to pay a $10 million penalty for potentially misleading customers in product disclosure statements about pricing discounts; RACQ admitted the contraventions and the parties jointly submitted the penalty was appropriate.
The case forms part of a wider crackdown on insurance conduct. In February 2025, Allianz Australia Insurance Limited and AWP Australia Pty Ltd were convicted and fined a combined $16.8 million in the NSW Supreme Court. In May 2025, the Federal Court ordered HCF life insurance Company Pty Ltd to pay a $750,000 penalty over a pre‑existing condition term deemed liable to mislead. ASIC’s 2025–26 Corporate Plan says it will examine the accuracy and transparency of general insurers’ premium disclosures and consumer experiences.
