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Insurers can now offer deferred payments to eligible small businesses until end-2020

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
12 June 2020 1 minute readShare
insurance

The ACCC is allowing insurers to continue to offer deferrals on premium payments to eligible small-business customers suffering hardship due to the COVID-19 pandemic.

Insurance companies and brokers can continue to offer COVID-19 relief measures for certain small businesses until 31 December 2020, the ACCC has said.

Under an urgent interim authorisation granted by the ACCC on 2 April 2020, insurers and brokers were granted temporary permission to co-ordinate a range of relief measures to eligible policyholders whose insurance premiums fall due before 30 June 2020.

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The ACCC has now proposed the extension of this measure, allowing Suncorp, Allianz, QBE Insurance and other insurers who have notified the regulator to continue to co-ordinate relief measures until 30 June 2020 and to keep these relief measures in place until 31 December 2020.

According to the ACCC, eligible business customers will be allowed to defer their premium payments for up to six months. 

 

They will also be refunded unused premiums for any insurance policy they need to cancel as a result of the pandemic, and will not be charged administration or cancellation fees if they do.

Additionally, all policyholders — including consumers, eligible small businesses and larger businesses — who cancel travel plans will be able to get a credit or refund for any unused travel insurance premiums, again without administration or cancellation fees. 

“There is clearly a need for these relief measures to continue as many small and medium-sized 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 co-operation 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.”

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The ACCC noted it 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,” Mr Ridgeway said.

The ACCC noted it has received a number of urgent formal requests for authorisations from many sectors of the Australian economy.

“The ACCC is closely assessing each of these applications to determine whether to grant them and for how long,” Mr Ridgeway said.

The ACCC will now seek feedback on the draft determination to grant the proposed authorisation and consider whether final authorisation should be granted.

Insurers can now offer deferred payments to eligible small businesses until end-2020
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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