Insurance Australia Limited trading as NRMA Insurance censured for incorrect calculation of weekly benefits

13 February 2023

SIRA has issued a letter of censure to CTP insurer NRMA Insurance following an investigation into the incorrect calculation of weekly benefits to over 2,000 customers.

In August 2020, NRMA Insurance became aware of an issue with the claims platform they use to calculate the weekly benefits paid to customers.

The technical issue meant that between 1 December 2017 until the date the issue was identified, some customers were underpaid or overpaid.

SIRA was notified of the matter and requested that NRMA Insurance provide a remediation plan.

In that plan, NRMA Insurance detailed an estimated $735,000 (excluding interest) was to be reimbursed to approximately 2,278 customers. They also advised that 123 customers had been overpaid, but they would not seek to recoup the overpayment.

SIRA worked extensively with NRMA Insurance during the remediation, including establishing fortnightly working group meetings which commenced on 2 December 2020.

SIRA’s investigation found that in failing to correctly calculate the weekly payment of statutory benefits payable to customers, NRMA Insurance had contravened sections 3.6(2), 3.7(2), 3.8(2) of the Motor Accidents Injuries Act 2017 (the Act) and their licence conditions.

On 7 November 2022, SIRA sent a show cause notice to NRMA Insurance, outlining the proposed findings.

NRMA Insurance accepted the proposed findings, and noted that on 15 June 2021, they had closed the remediation plan and rectified the underpayment of customers.

After considering the results of its investigation and submissions by NRMA Insurance, SIRA decided the appropriate enforcement action in this case was a letter of censure.