ASIC Acts on Misleading Advertising by ACE Insurance, Tigerair and Priceline
Monday 29 February 2016 @ 9.50 a.m. | Legal Research | Trade & Commerce
As reported in a recent ASIC Media Release and following concerns raised by the Australian Securities and Investments Commission (ASIC):
- ACE Insurance Limited (ACE Insurance); and
- Tiger Airways Australia Pty Limited (Tigerair)
have removed misleading promotional statements on their websites about ACE Insurance travel insurance policies. Separately, ACE Insurance has responded to ASIC’s concerns about the misleading promotion of Priceline Protects Bill Protection Insurance Policy.
ACE Insurance is the issuer of the Tigerinsure domestic insurance, the Tigerinsure International insurance and the ACE Annual Travel Insurance Policy. Tiger Airways Australia Pty Limited is an authorised representative of ACE Insurance Limited.
The Priceline Protects Bill Protection Insurance Policy was issued by ACE Insurance Limited, and promoted and distributed by Priceline Pty Limited.
The Role of ASIC
ASIC’s role is to contribute to Australia’s economic reputation and well-being by ensuring that Australia’s financial markets are fair and transparent, supported by confident and informed investors and consumers.
ASIC is set up under, and administers the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), and most of the work is carried out under the Corporations Act 2001 (Cth) (Corporations Act).
The ASIC Act requires the regulator to:
- maintain, facilitate and improve the performance of the financial system and entities in it;
- promote confident and informed participation by investors and consumers in the financial system;
- administer the law effectively and with minimal procedural requirements;
- enforce and give effect to the law;
- receive, process and store, efficiently and quickly, information that is given to us; and
- make information about companies and other bodies available to the public as soon as practicable.
Which Laws do ASIC administer?
Listed below is a small sample of legislation (as well as any relevant regulations made under it) administered by ASIC:
- Australian Securities and Investments Commission Act 2001;
- Corporations Act 2001;
- Business Names Registration Act 2011;
- Insurance Contracts Act 1984;
- Superannuation (Resolution of Complaints) Act 1993;
- Superannuation Industry (Supervision) Act 1993; and
- National Consumer Credit Protection Act 2009.
Background to ACE Insurance, Tigerair and Priceline
ACE Insurance and Tigerair's promotion of ACE Insurance's Tigerinsure travel insurance policies on their websites included claims that the insurance policies covered flight cancellation and amendment, loss of deposits and cancellation charges. However, the Tigerinsure policies excluded cover for Tigerair's delays, cancellation or rescheduling.
ASIC was concerned that the website representations were not consistent with the cover as set out in the policies and product disclosure statements. Following these concerns, ACE Insurance and Tigerair removed the misleading representations.
In a separate matter, the Priceline Protects Bill Protection Insurance Policy was promoted on the Priceline website as providing “up to $2,500 cover per month” with “competitive premiums from $2.80* per week.”
However, in order to receive this maximum cover per month, premiums would cost around $13 per week, over four times more than the advertised price. ASIC was concerned that referring to the maximum benefit of cover (“up to $2,500”) in conjunction with the minimum premium payable (“from $2.80 per week”), could mislead consumers about the price of the benefit being promoted. After ASIC raised its concerns, ACE Insurance has agreed to contact its current and former policy holders and offer them a full refund of the premiums paid. ACE Insurance is no longer selling this product.
Response from ASIC
The ASIC Deputy Chairman, Peter Kell said:
“Insurance and other financial products should not be promoted in a way that misleads consumers about the price and benefits of the product. Consumers should be confident that they are paying the price and getting the benefits that they understand they are getting. ASIC will continue to monitor advertising to ensure it is not misleading.”
ACE Insurance will contact all Priceline Protects Bill Protection Insurance policyholders about their policies.
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Sources:
ASIC stops misleading website advertising by ACE Insurance, Tigerair and Priceline - 16-014MR
