The Australian Competition and Consumer Commission will not overturn notified arrangements* for motor vehicle insurance policies offered by the Insurance Australia Group (IAG)**.
"IAG notified the ACCC of arrangements relating to the offering of comprehensive motor vehicle insurance policies to consumers under their Standard Policies and their Choice of Repairer Policies", ACCC Chairman, Mr Graeme Samuel, said. "Under the scheme, customers wanting to have the choice of repairer are required to pay a higher premium than those who choose a standard policy and allow the insurer to determine the repairer.
"The ACCC's assessment was limited to considering the pros and cons of the conduct notified – that is, the offering of a cheaper premium to customers that agree to their insurer choosing the repairer under the PSR arrangements.
The ACCC accepted IAG's submission that the arrangement allows it to more efficiently price their motor vehicle insurance products.
"The ACCC noted that consumers are still able to have a choice of repairer - either through deciding to pay the additional premium to obtain this choice with IAG or by acquiring motor vehicle insurance through an alternative insurer", Mr Samuel said.
This decision does not relate to other aspects of IAG's preferred smash repairer (PSR) arrangements. For example, the notified arrangements do not cover how PSR's are chosen or IAG's contractual arrangements with PSR's. The merits of IAG's Web Based Repair Management scheme were also outside the scope of the ACCC's assessment.
In November 2004, the Productivity Commission released a draft report relating to the relationship between the Australian motor vehicle smash repair industry and the motor vehicle insurance industry. The ACCC notes that the draft report provides detailed analysis and recommendations relating to the broader issues between the motor vehicle insurance and smash repair industries. The draft report is available from the Productivity Commission website www.pc.gov.au.