Canterbury earthquake continues to shake IAG’s pocket
New Zealand’s Commerce Commission has reached a settlement with insurer IAG New Zealand Limited after it admitted to breaching the NZ Fair Trading Act in relation to more than 150,000 insurance policies. As a result of inflation adjustment errors, IAG will fork out NZ$3.48 million to compensate policyholders in respect of assessments following the Canterbury earthquake. Whilst IAG’s error was administrative, it did have potentially far-reaching effects on people at their most vulnerable following significant personal loss. However, Kate Morrison of the Commission commended IAG for immediately advising the NZCC in October 2011 and avoiding potentially lengthy and costly investigation.
This situation serves a caution to Australian companies to take particular care in dealing with the consequences of natural disasters, particularly in light of the ACCC’s enforcement priorities relating to climate-affected initiatives, such as carbon pricing, and its desire to protect vulnerable consumers.