National Mutual Health Insurance Pty Ltd, trading in Victoria as HBA Health Insurance - s.93AA undertaking

The ACCC investigated National Mutual Health Pty Ltd trading as HBA, in relation to television advertising. The advertisements of concern were broadcast in Victoria during April and early May 2000. The advertisements of concern depicted the same scenario; one of 30 seconds duration and the other of 15 seconds duration. The advertisements depicted a cyclist colliding with the rear of a stationary bus after avoiding the opening door of a stationary motor vehicle.

The Commission was of the view that the advertisements were likely to mislead or deceive the public about the benefit and utility, which may be obtained from HBA health insurance in most motor traffic accidents. In Victoria, most persons involved in traffic accidents are able to claim hospital, medical and other out of pocket expenses through the compensation scheme operated by the Transport Accident Commission ("the TAC") resulting in little or no cost to claimants.

An undertaking was received from National Mutual Health Insurance to:

• refrain from broadcasting the advertisements;
• televise a revised version of the advertisement referring to the TAC scheme;
• implement certain measures to advise the public and its members of the TAC scheme; and
• refund and cancel cover for any person who has taken up HBA membership who believes they were misled by the advertisement and requests the same in writing.

This undertaking was made and accepted pursuant to section 93AA of the Australian Securities and Investment Commission Act 1989 (the ASIC Act) as opposed to section 87B of the Trade Practices Act 1974. Health insurance is regulated through the ASIC Act, as it appears to fall within the definition of a financial product. This was an unintended consequence of the amendments made to the ASIC Act in 1998, as Treasury, the ACCC and ASIC all intended that health insurance was to remain in the ACCC's jurisdiction. ASIC has since December 1998 formally delegated all consumer protection aspects of health insurance to the ACCC, through use of nominated ACCC officers as delegates.