BUSINESSDESK: IAG New Zealand, the insurer that bought AMI Insurance for $380 million, has agreed to pay up to $3.5 million after finding a miscalculation in last year's Canterbury earthquake claims in some historical home and contents policies.
The Sydney-based insurer told the Commerce Commission last year about the mistake, which meant it breached the Fair Trading Act with certain policies under the State, Lantern, Corporate Partners and NZI brands, it says.
IAG miscalculated the sum insured on 643 policies dating back as far as 1980 and has paid out about $1.35 million on those, with a further $626,000 from 105 other claims under review.
About 130 current claims will incur extra payments, which the insurer estimates will be fall between $1 million and $1.5 million, and a further 150,000 customers will need their policies adjusted.
The insurer will also pay the regulator's costs of $10,406.
Commerce Commission competition general manager Kate Morrison commended IAG for advising the regulator of the problem and "for being prepared to put matters right".
"Through its proactive response IAG has avoided a potentially lengthy and costly investigation and affected customers have been, or will be, compensated."
IAG will commission an independent final report prepared by the end of September next year confirming substantial completion of its repayments as at July 31, with the total payments made, the number of policyholders who have not received payment and an opinion on whether the terms of the agreement with the regulator have been met.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Housing stats show just about everything's getting worse
- Sri Lanka: PM's visit signals it's open for business
- Sir Bob Jones: Why the newspaper industry is deservedly dying
- Adobe, Microsoft, Google signal price rises from Oct 1 as GST net thrown wider (thanks, Spark)
- Brash, Wall clash over Hobson's Pledge campaign
Most listened to
- Week in Review: a wrap of NBR Radio's top stories, interviews and analysis
- Matthew Hooton: Little leaves centre wide open for Peters and Greens
- ASB's Kim Mundy and Realestate.co.nz's Vanessa Taylor on the latest housing statistics
- Rob Hosking: Winston’s hour is coming
- Hunter's Corner: High stakes for both sides of Warminger case