RACQ fights ASIC claim over renewal notices after public apology
A legal dispute over how renewals were presented
RACQ is defending the way it presented insurance renewal information after the Australian Securities and Investments Commission (ASIC) alleged the organisation misled customers through the use of a “last period premium” figure on renewal notices.
The case centres on renewal certificates issued across multiple insurance products, including home, boat and pet insurance. ASIC alleges that, in a significant number of cases, the “last period premium” shown on renewal documents did not match what customers had actually paid in the previous period. RACQ, however, says the price charged to customers was correct at all times and disputes that the renewal notices would have misled an ordinary policyholder.
The dispute is notable not only because of the scale alleged by the regulator, but also because RACQ publicly apologised when the issue emerged and said it had changed its approach. In Federal Court filings, the insurer is now contesting the substance of ASIC’s allegations and downplaying the likelihood that the comparison affected customer behaviour.
What ASIC alleges happened
ASIC’s lawsuit alleges at least 434,548 renewal certificates were issued between September 2019 and December 2024 where the “last period premium” did not reflect the actual amount paid by the policyholder.
The regulator’s concern is about the comparison embedded in renewal materials: customers were shown a new premium for the upcoming period alongside a “last period premium” figure, even though that historical figure was not necessarily the amount the customer ultimately paid. ASIC alleges this could create a misleading impression of how much a premium had increased or decreased.
ASIC’s case also points to customer feedback over time. According to the lawsuit, customers had complained to RACQ since 2019 that the comparison was “very misleading”. The regulator’s position is that the renewal notices did not make clear that the “last period premium” could have been subject to adjustments, such as discounts agreed after an initial quote.
How the “last period premium” could differ from what customers paid
In the material at issue, the “last period premium” shown on a renewal notice could be based on an earlier figure rather than the final price paid after changes were made. The extracted content describes a key reason: the “last period premium” could exclude details such as discounts subsequently agreed after an initial quote.
That distinction matters because many customers focus on the year-to-year comparison in renewal documents. A comparison that uses a higher “last period premium” than what was actually paid could make an increase appear smaller than it really is, potentially affecting how a customer perceives the renewal offer.
An example used to illustrate the issue
One example cited involves an RACQ customer, John Monks, who received a renewal notice for his Gold Coast home insurance. The notice reportedly listed a “last period premium” of $6,930.55 and a new “this period premium” of $7,033.57, which would appear to represent a rise of about 1.5 per cent.
However, the extracted content states that Mr Monks had negotiated a discount and had actually paid $5,024.18 in the previous year. On that basis, the renewal price rise was effectively far larger—stated as 39.9 per cent.
This example is central to understanding ASIC’s concern: the comparison presented in the renewal notice may have conveyed a different impression of the price movement than a comparison based on the amount the customer actually paid.
RACQ’s public apology and change in practice
When the issue became public and the regulator accused RACQ of misleading customers, the organisation issued a strong public apology. RACQ said it had changed renewal notices so they would reflect actual pricing changes.
At the time, RACQ stated: “We are disappointed this has happened and apologise to our members as this is not in keeping with our high standards or the experience we strive to offer.”
The extracted content also says RACQ ceased the practice of comparing the upcoming premium against a “last period premium” that was not necessarily what the customer had actually paid.
What RACQ is arguing in its defence
Despite the earlier apology and changes, RACQ’s Federal Court defence documents deny the renewal notices were misleading. The insurer rejects ASIC’s allegation that an average policyholder would have believed the “last period premium” amount was the amount they had actually paid.
RACQ’s position, as described in the extracted content, is that policyholders would have known the initial premium quote, would have been aware of any subsequent changes to premiums from that quote, and would have known why they sought a change. On that basis, RACQ argues that an “ordinary and reasonable policyholder” would have understood the context of the “last period premium” amount listed in the renewal notice.
RACQ has also maintained publicly that the lawsuit concerns what was listed on the renewal notice, while the actual price charged to customers “at all times was correct”.
In addition, RACQ’s defence attempts to reduce the impact of ASIC’s allegations about how customers may have responded to the pricing comparison. ASIC alleged customers could have missed out on shopping around if they were not given accurate price comparisons. RACQ’s defence counters that renewal rates were not materially different between unaffected and affected customers.
ASIC’s reply: why the regulator says the notices still misled
ASIC’s legal reply rejects RACQ’s argument that customers would have understood the “last period premium” figure in context. The regulator says the renewal notices did not clarify that the “last period premium” had been subject to adjustments.
ASIC also argues that even if a customer had adjusted pricing and received paperwork earlier, they could not reasonably be expected to remember those contents or cross-reference them with the “last period premium” on the latest renewal notice.
This point goes to how renewal documents are typically used: customers may rely on the renewal notice itself as a summary of the prior period and the upcoming offer, rather than reconstructing past changes from earlier communications.
How widespread were the differences?
The court documents referenced in the extracted content indicate that roughly 70 per cent of the 434,548 renewal certificates had a comparison premium that was higher than what people had truly paid.
RACQ also contends that in a majority of the affected certificates, the difference between the amount customers actually paid and what they were told was the “last period premium” was less than $200.
These two points—how often the comparison differed and by how much—are likely to be central to how the court assesses the overall impact of the alleged conduct, including whether the presentation could have influenced customer decisions.
Customer complaints and broader pressure on premiums
The extracted content notes that customers had complained to RACQ since 2019 that the comparison was “very misleading”, as alleged by ASIC.
It also states that RACQ has seen a spike in complaints as premiums rise and insurance claims are mishandled. While the extracted content does not provide detail on those separate issues, it places the renewal-notice dispute in the broader context of heightened customer sensitivity to pricing and service in insurance.
Key points at the heart of the case
The meaning of “last period premium”: ASIC alleges it was presented in a way that implied it was what customers paid, while RACQ argues customers would have understood it as an earlier quoted amount that could have been adjusted.
Disclosure and clarity: ASIC says the renewal notices did not explain that the “last period premium” could differ due to adjustments such as discounts.
Customer memory and reliance: ASIC argues customers should not be expected to recall or cross-check prior paperwork; RACQ argues policyholders would have known the context of any changes they requested.
Scale and impact: ASIC alleges at least 434,548 certificates were affected; documents indicate about 70 per cent had a higher comparison premium than what was paid, while RACQ says most differences were under $200 and that renewal rates were not materially different between affected and unaffected customers.
Public apology versus legal defence: RACQ apologised publicly and changed the practice, but is now denying the earlier notices were misleading in court filings.
RACQ’s explanation of its court response
RACQ has framed its defence as part of the legal process. The extracted content quotes the organisation saying: “We are required to respond to ASIC’s statement of claim as part of the legal process.”
That statement sits alongside RACQ’s broader insistence that, whatever the dispute about the wording and comparison on renewal notices, the prices charged to customers were correct.
Why renewal comparisons matter to policyholders
Renewal notices are a key moment in the relationship between insurer and customer, because they provide the information many people use to decide whether to stay, negotiate, or look elsewhere. A comparison that appears to show only a small increase may be interpreted differently from a comparison based on the customer’s actual prior payment.
ASIC’s allegations focus on that decision-making context: if the “last period premium” shown is higher than what was paid, the renewal may appear more competitive than it is. RACQ disputes that this would mislead an ordinary and reasonable policyholder, arguing that customers would have understood the earlier quote and any subsequent changes.
What is not in dispute in the extracted content
Based on the extracted content, several points are clear:
ASIC has commenced legal action against RACQ over renewal notices and the use of “last period premium” figures.
RACQ has publicly apologised and said it changed its renewal notices to reflect actual pricing changes.
RACQ is now defending the earlier notices in court filings, denying they were misleading.
RACQ maintains the actual price charged to customers was correct.
What happens next
The extracted content does not describe any court outcome. What it does show is a clear contest between the regulator and the insurer over how consumers interpret renewal information, and whether the way the “last period premium” was presented could have led customers to misunderstand changes in their premium.
As the matter proceeds, the arguments outlined in the filings—about what an ordinary policyholder would understand, what the notices did or did not explain, and whether the differences were likely to affect behaviour—will remain central to the dispute.