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
- Transmission Gully earthworks estimate undershoots by 50%
- Never mind the policy, feel the good intentions, Ardern says
- What New Zealanders feel about English and Ardern – and why it matters
- Fuji Xerox sues former executives
- Fuel crisis latest – pipe repair progress as government loosens rules for fuel trucks
Most listened to
- Labour leader Jacinda Ardern joins Simon Dallow in the NBR View studio this morning
- Housing strategist Leonie Freeman discusses the alarmingly low rates of new house builds in Auckland
- Jason Walls canvasses reaction to Labour exploring tax breaks for SME investment
- Synlait managing director John Penno on capacity constraints and supplying China
- NBR Radio: best of the week ended September 15, with Grant Walker