NRMA Insurance fined after overcharging NSW drivers millions in premiums

NRMA Insurance has been fined nearly $500,000 after pricing errors resulted in customers being overcharged for compulsory third-party (CTP) insurance in New South Wales (NSW).

The State Insurance Regulatory Authority (SIRA) imposed eight civil penalties totalling $479,500 on Insurance Australia Limited (IAL), trading as NRMA Insurance, which is refunding affected customers.

IAL is part of Australia's largest insurer, Insurance Australia Group (IAG), which also owns 90 per cent of RACQ Insurance, among other brands.

CTP insurance, commonly known as a green slip, is required to register a vehicle in NSW.

The most serious pricing error affected approximately 41,564 policies, with estimated customer overcharges totalling $12.17 million.

SIRA found an address-data error caused “incorrect rating districts” to be applied, resulting in premiums inconsistent with the insurer’s approved pricing.

The regulator described this as “the most serious of the eight matters” for which NRMA Insurance was penalised.

“The matter involved a substantial affected population, significant estimated customer detriment and failures in core pricing and data controls,” SIRA said in its findings.

“The resulting departure from the premiums filed with the Authority also affected the integrity of the regulated premium framework.”

Across the eight matters, NRMA Insurance was found to have breached requirements of the Motor Accident Injuries Act 2017, the Motor Accident Guidelines and its insurer licence.

Other matters included underpaying cancellation refunds by an estimated $118,421; failing to apply a discount to eligible customers, resulting in estimated overcharges of almost $662,000; and incorrect risk-state mapping, resulting in estimated overcharges of $70,320.

“The issues exposed significant weaknesses in NRMA Insurance’s pricing, data and system controls, resulting in incorrect premiums, customer overcharges and under-refunds,” a statement from SIRA said.

“NRMA Insurance cooperated with SIRA throughout the investigation and is undertaking remediation for affected motorists, including refunds for identified overcharges.”

SIRA previously fined NRMA Insurance $10,000 in December 2024, announcing the penalty in January 2025, for failing to disclose demerit-point loadings on CTP renewal policies and incorrectly applying those loadings.

IAL was also fined $40 million in 2023 over promised loyalty discounts that were not delivered.

According to Insurance News, NRMA Insurance acknowledged the latest penalties in relation to “issues we identified and self-reported” earlier this year.

“Once identified, our focus was addressing the issues, apologising to those customers impacted, and providing remediation payments, with interest, as quickly as possible,” a spokesperson told Insurance News.

“The issues were identified as part of our transition from a legacy operating system to a new technology platform (our Enterprise Platform).

“The new technology platform is a significant enhancement to our policy and claims system which will help to prevent similar issues happening in the future.”

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