The Australian Securities and Investments Commission (ASIC) have issued a media release concerning two cases of misleading website advertising of insurance products. The cases demonstrate ASIC’s strict approach and serve as a reminder to insurers that, when advertising insurance products, caution must be taken with regard to the representation of premiums paid and the extent of the product’s cover.
Misleading advertising by Tigerair and ACE Insurance
Both Tiger Airways Australia Pty Limited (Tigerair) and ACE Insurance Limited (ACE Insurance) promoted ACE Insurance’s Tigerinsure travel insurance policies on their websites in a way that ASIC considered to include misleading promotional statements. ACE Insurance is the issuer of the Tigerinsure domestic insurance, the Tigerinsure International insurance and the ACE Annual Travel Insurance Policy. Tigerair is an authorised representative of ACE Insurance.
The advertisements claimed 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.
Misleading advertising by Priceline
ACE Insurance has, in a separate matter, responded to ASIC’s concerns regarding the misleading promotion of Priceline Protects Bill Protection Insurance Policy. The Priceline Protects Bill Protection Insurance Policy, issued by ACE Insurance and distributed by Priceline, was promoted on the Priceline website as providing ‘up to $2,500 cover per month’ with ‘competitive premiums from $2.80* per week.’
However, the premiums would cost around $13 per week in order to receive the maximum cover per month which is over four times more than the advertised price. ASIC, in its media statement, noted that it 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.
Priceline ceased to offer the Bill Protection product as of July 2015 and agreed to contacts its current and former policy holders to offer them a full refund of the premiums paid.