NRMA Insurance, a trading name of Insurance Australia Limited, has acknowledged it failed to correctly index some CTP weekly benefit payments since 2019. The company initially estimated about 700 people had been underpaid, before revising the number down to 400. It also told the ABC it had identified a further cohort of people it believed were owed interest after previously receiving lump sum payments.
The error was not found by NRMA itself, nor by NSW's State Insurance Regulatory Authority (SIRA), despite SIRA having previously launched an audit of the company's practices. Instead, the mistake was spotted by a lawyer who realised their client's weekly payments did not add up.
Greens MP Abigail Boyd criticised the insurer, saying it was "mind blowing" that a multi-billion dollar company did not have an automated system to index payments correctly. "It actually blows my mind," she said. "I don't understand how this multi-billion dollar company doesn't have that automated system in place." She called it "particularly extraordinary" that NRMA had not discovered the issue itself and highlighted the "massive power differential between these insurers and these injured people who are going through some of the worst times of their lives."
Under the state's CTP scheme, people injured in motor vehicle accidents who are unable to work are entitled to income support payments, starting at 95 per cent of pre-accident weekly earnings and dropping to a maximum of 85 per cent from 14 weeks onwards. These payments are supposed to be adjusted twice a year in line with average weekly earnings.
NRMA, which markets itself as "a help company", acknowledged it had incorrectly applied this principle, costing the average affected claimant $940. In a statement, the company said: "We became aware in late April this year, through a customer's legal representative, that the statutory indexation may not have been correctly applied to weekly benefit payments for customers who continued receiving payments more than 78 weeks after their accident."