The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Hollard Insurance Partners, alleging serious failures in the handling of an insurance claim.
Filed in Federal Court, the case focuses on a home building and contents insurance claim that took Hollard nearly three and a half years to resolve.
ASIC stated the company failed to meet its obligation of good faith under the Insurance Contracts Act.
According to the regulator, a couple from regional Victoria submitted the claim on October 31, 2021, after a storm caused significant roof damage to their home. Hollard took 18 months to issue a rejection.
Although the company initially accepted the claim, it delayed decisions on repairs and waited more than nine months before arranging an inspection by a structural engineer. Temporary accommodation was also delayed.
In April 2023, Hollard rejected the claim, citing a non-expert opinion over earlier expert assessments of the damage.
The couple refused a low-value cash settlement and escalated the matter to the Australian Financial Complaints Authority.
ASIC reported that the delays, poor communication, and disregard for professional advice caused significant harm.
The home became uninhabitable due to prolonged exposure to moisture, mold, and decay. The building now requires demolition and reconstruction.
Sarah Court, ASIC’s deputy chair, said Hollard’s inaction directly contributed to the deterioration of the property. ASIC is seeking a civil penalty and formal declarations from the court.
Hollard Insurance Partners, formerly known as Commonwealth Insurance, holds a 4.4% share of Australia’s general insurance market and ranks as the fifth-largest general insurer.
The company reported estimated annual revenue of A$2.31bn for FY2024 and employs over 1,600 people.
ASIC noted that Hollard Holdings Australia Pty, Hollard’s parent company, completed the acquisition of Commonwealth Insurance in September 2022.
Previously, ASIC filed a separate lawsuit against the Construction and Building Unions Superannuation Fund (Cbus Super), citing widespread delays in processing death and disability claims. That action involves more than 10,000 affected members, with some claims taking over 90 days to process.
The allegations against both entities are detailed in filings submitted to Australia’s Federal Court.
