The Australian Competition and Consumer Commission (ACCC) has announced a proposal to allow insurance companies and brokers to continue coordination and implementation of temporary COVID-19 relief measures for certain small businesses.
“There is clearly a need for these relief measures to continue as many small and medium-size Australian businesses continue to experience unprecedented financial hardship due to the COVID-19 pandemic,” ACCC Commissioner Stephen Ridgeway said.
“There is a public benefit in authorising cooperation about these measures until the end of June 2020, as it will provide greater transparency and consistency of relief for small businesses. There is minimal, if any, public detriment.”
“However, the ACCC will continue to monitor this authorisation to ensure it does not result in unintended consequences impacting competition in the insurance industry.”
“We also note that there is nothing to stop individual insurers from offering more relief than is agreed under the authorisation or from continuing to offer relief to policyholders after the authorisation has expired,” Ridgeway stressed.
The authorisation will apply to Suncorp, Allianz, QBE Insurance and other insurers or insurance brokers who have previously notified the ACCC. These measures that were initially put in place in April included allowing eligible small business customers suffering hardship due to the COVID-19 pandemic to defer their premium payments for up to six months.
ACCC authorisation provides statutory protection for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC grants an authorisation in certain circumstances when it is satisfied that the public benefit from the conduct outweighs any public detriment.
Under the initial urgent interim authorisation granted by the ACCC on 2 April 2020, insurers and brokers were granted temporary permission to coordinate a range of relief measures to eligible policyholders whose insurance premiums fall due before 30 June 2020.
The ACCC is now proposing to grant authorisation to allow insurers and brokers to continue coordination of relief measures until 30 June 2020, and to keep these relief measures in place until 31 December 2020.
The authorisation also will allow collaboration on continuing to offer to eligible business customers refunds on unused premiums for any insurance policy they need to cancel as a result of the pandemic, and to not be charged administration or cancellation fees if they do.
The relief measures covered by the authorisation include an agreement that all policyholders, including consumers, eligible small businesses and larger businesses who acquired travel insurance prior to 30 June 2020 and who can no longer travel as planned due to the impact of COVID-19, will be able to get a credit or refund for any unused travel insurance premiums, again without administration or cancellation fees.
The ACCC has indicated that it will now seek feedback on the draft determination to grant the proposed authorisation and consider whether final authorisation should be granted. The consumer watchdog’s statement of reasons and details on how to make a submission is available at the ACCC’s public register.