The State Insurance Regulatory Authority (SIRA) has imposed a fine of nearly $500,000 on Insurance Australia Limited (IAL), operating as NRMA Insurance, for overcharging New South Wales drivers millions in compulsory third-party (CTP) insurance premiums due to pricing errors. IAL, a subsidiary of Australia’s largest insurer, Insurance Australia Group (IAG), which also owns 90% of RACQ Insurance, received eight civil penalties totaling $479,500.
The most serious error affected about 41,564 policies, with estimated overcharges totalling $12.17 million. SIRA found an address-data error caused “incorrect rating districts” to be applied. The regulator called this “the most serious of the eight matters.”
SIRA noted that the issue affected a large number of customers, caused significant financial harm, and exposed flaws in NRMA Insurance’s pricing and data management. The insurer has cooperated with SIRA’s investigation and is compensating affected drivers, including refunding overcharged amounts. The errors led to premiums that did not align with the approved pricing structure.
Across all eight matters, NRMA Insurance breached the Motor Accident Injuries Act 2017, the Motor Accident Guidelines, and its insurer licence. Other issues included underpaying cancellation refunds by an estimated $118,421 and failing to apply a discount, leading to overcharges of almost $662,000. SIRA previously fined NRMA Insurance $10,000 in December 2024, announcing the penalty in January 2025, for failing to disclose demerit-point loadings on CTP renewal policies and incorrectly applying those loadings.
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“The issues exposed significant weaknesses in NRMA Insurance’s pricing, data and system controls,” a SIRA statement said. The insurer is refunding affected customers. IAL was also fined $40 million in 2023 for failing to provide promised loyalty discounts.
NRMA Insurance acknowledged the penalties in relation to “issues we identified and self-reported.” A spokesperson said the issues were found during a transition to a new technology platform. The company stated its focus was on “addressing the issues, apologising to those customers impacted, and providing remediation payments, with interest, as quickly as possible.”
The new platform, the spokesperson added, “is a significant enhancement to our policy and claims system which will help to prevent similar issues happening in the future.”
