ASIC has issued two infringement notices totalling $37,560 to Zurich Australia after it self-reported incorrectly declining two insurance claims.
Zurich discovered its mistake during a quality assurance review, told ASIC, and paid the benefit entitlements with interest. The firm paid the infringement notices on 8 May 2025.
The declined claims issue dates back to May last year when Zurich declined two trauma insurance claims related to its OneCare Trauma Premier policy, advising the policyholders their medical conditions were excluded, and no benefit was payable.
ASIC alleges these statements were false or misleading as the policy terms applicable to the trauma cover held by the policyholders did not exclude their conditions, and they were entitled to a benefit payment.
…insurers should ensure claims staff have an awareness of, and ready access to, the applicable policy terms and conditions…
Insurance claims handling was an enforcement priority for ASIC last year, and failures by insurers to deal fairly and in good faith with customers is an enforcement priority this year.
ASIC states it wants to enhance public confidence in the insurance industry by encouraging Zurich and other life insurers to improve “their claims handling processes and ensure consumers are not misled about their rights or entitlements under their insurance policies”.
“For example, where the handling of a claim involves a legacy product or policy enhancements passed back to existing policyholders, insurers should ensure claims staff have an awareness of, and ready access to, the applicable policy terms and conditions,” states ASIC.
The regulator states that issuing infringement notices provides a proportionate and prompt regulatory response to an alleged contravention. Payment of an infringement notice is not an admission of liability.
