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16-191MR ASIC curbs misleading pet insurance advertising
Following ASIC action, Allianz Australia Insurance Limited (Allianz) has compensated 740 Petplan insurance customers over $231,000 and its agent, Petplan Australasia Pty Ltd (Petplan), has corrected its Petplan advertising.
Petplan's website promoted the Petplan insurance product with a headline statement that the policy provided a 100% rebate on claims for veterinary bills. A small-print disclaimer then qualified this by stating that the 100% rebate excluded a fixed excess and non-claimable items.
ASIC was concerned that the representation about the 100% rebate on veterinary bills created an impression that Petplan customers were entitled to receive the full value of the 100% rebate on claims for veterinary bills. However, customers cannot receive the 100% rebate value for a claim made for a pet aged 8 years and over because, in addition to a fixed excess of $150, a variable excess amount (20% for a pet aged 8 years or 35% if 10 years or over) is deducted from the final claim payment made to customers.
In response to ASIC's concerns that the representation was misleading, Allianz has agreed to:
- remove all references to the 100% rebate on veterinary bills from the Petplan website;
- compensate relevant policyholders who had a variable excess amount deducted from their claim amount; and
- update the product disclosure statement and the online sales process to clearly disclose the existence and application of the variable excess for pets aged 8 years and over.
ASIC Deputy Chairman Peter Kell said, 'Promotional claims that are made in absolute terms about a potential benefit must not create expectations that cannot be met. A misleading impression created by a headline claim cannot be corrected by a small-print disclaimer. When firms do not meet these standards ASIC will continue to take action to ensure better consumer outcomes.'
Customers with queries or concerns about this matter should contact Petplan on 1300 738 225.
Petplan insurance is issued by Allianz and distributed by Petplan Australasia Pty Ltd. The Petplan policy provides cover for the cost of veterinary expenses arising from the treatment of injury, accident or illness in a pet dog or cat.
In 2013, following ASIC's industry review which identified concerns about disclosure in product disclosure statements (PDSs) and promotional online materials, pet insurers made improvements to address ASIC's concerns (refer: 13-249MR). This included improving disclosure about the need for consumers to pay additional excesses in the event of a claim.
ASIC Regulatory Guide 234: Advertising financial products and servies (including credit): Good practice guidance (RG 234) contains good practice guidance to help promoters of financial products comply with their legal obligations to not make false or misleading statements or engage in misleading or deceptive conduct.