NRMA Insurance fined $479,500 by NSW regulator over green slip overcharging

Eight penalties for CTP pricing failures

The NSW State Insurance Regulatory Authority (SIRA) has imposed eight civil penalties totalling $479,500 on Insurance Australia Limited (IAL), which trades as NRMA Insurance, after pricing errors led to customers being overcharged for compulsory third party (CTP) insurance, commonly known as a green slip. The penalties are reported by the ABC, Insurance News, CarExpert, Insurance Business and Yahoo Finance. SIRA handed down the penalties in a letter dated October 22, 2026, after finding NRMA Insurance had breached requirements of the Motor Accident Injuries Act 2017, the Motor Accident Guidelines and its insurer licence. ¹²³⁵⁴

CTP insurance is required to register a vehicle in NSW, and IAL is part of Insurance Australia Group (IAG), Australia's largest general insurer. NRMA Insurance is one of six authorised CTP providers in the NSW scheme and is remediating affected motorists, having co-operated with SIRA throughout the investigation, according to Insurance News. ¹⁵

The $12.17 million rating-district error

The most serious of the eight matters saw an address-data error in the insurer's legacy Huon policy administration system cause incorrect rating districts to be applied, resulting in premiums inconsistent with the insurer's approved pricing. Approximately 41,564 policies were affected, with estimated gross customer overcharges of about $12.17 million, and SIRA levied a $90,000 penalty for that matter, the largest of the eight, Insurance News reported. Under the NSW CTP scheme, postcodes are grouped into five geographic districts, with Sydney metropolitan rated highest risk, and outer metropolitan, Wollongong, Newcastle/Central Coast and country districts rated lower on average. ¹⁵²⁶³

"The matter involved a substantial affected population, significant estimated customer detriment and failures in core pricing and data controls," SIRA said in its findings. "The resulting departure from the premiums filed with the Authority also affected the integrity of the regulated premium framework." An NRMA Insurance spokesperson told the ABC its legacy operating system had not updated certain policies when a customer changed address, so the CTP premium had not been updated, and that the issue affected policies across the state rather than being tied to a particular region or suburb. ¹²

The other seven matters

Across the remaining matters, Insurance News detailed a failure to apply a relationship discount to eligible new customers from April 2024 until November 2025, affecting 16,033 policies with estimated overcharges of about $662,000; cancellation refunds calculated from the policy purchase date rather than policy commencement, affecting about 15,176 policies with estimated under-refunds of $118,421; and incorrect risk-state factors affecting 2831 policies and 2762 customers, with estimated overcharges of about $70,320. ⁵

Insurance News also reported an incorrect maximum malus factor in the price-ceiling calculation affecting 24,579 policies, with estimated overcharges of $226,635. Insurance Business reported that the wrong pricing-cap input pushed premiums above the regulatory ceiling for those policies over roughly 19 days in early 2026. Insurance News further reported an 11-day use of a superseded July 2024 premium filing that under-collected $81,568 in fund levies, which IAG later paid. Separately, from April 2024, inaccurate years-of-relationship information appeared in renewal documents, requiring review of about 727,000 policies and assessment of roughly 611,000 customers. SIRA was explicit that the penalty for that matter was not based on any assumed customer loss, Insurance Business noted, as those are review populations rather than confirmed affected numbers. ⁵³

For January and April 2025 premium filings, incorrect vehicle relativities affected 303,475 policies, with estimated overcharges of $26,945 and estimated undercharges of about $1.7 million, Insurance News reported. IAG has not sought to recover the undercharges. The total penalty package included a 15 per cent discount on the combined figure because several errors shared a common root in the Huon operating environment, according to Insurance Business. ⁵³

Company response and remediation

NRMA Insurance acknowledged the penalties in relation to what it described as "issues we identified and self-reported" earlier this year, telling Insurance News: "Once identified, our focus was addressing the issues, apologising to those customers impacted, and providing remediation payments, with interest, as quickly as possible." The spokesperson said the issues were identified during a transition from a legacy operating system to a new technology platform, its Enterprise Platform, described as "a significant enhancement to our policy and claims system which will help to prevent similar issues happening in the future". IAG was first notified of problems in October 2025, Insurance News reported. ¹⁵

SIRA's executive director of regulatory operations, Lauren Sayer, said the regulator would closely monitor the repayments to ensure all affected customers were properly compensated. "Incorrect premiums in the NSW Compulsory Third Party Scheme can cause direct financial detriment, affect CTP affordability and sustainability, as well as undermine confidence in the fairness and integrity of the scheme," she said, according to the ABC and Yahoo Finance. ²⁴

Regulatory history and what remains outstanding

This is not the insurer's first brush with the regulator. SIRA previously fined NRMA Insurance $10,000 in December 2024, announced in January 2025, for failing to disclose demerit-point loadings on CTP renewal policies and incorrectly applying those loadings, CarExpert reported. IAL was also fined $40 million in 2023 over promised loyalty discounts that were not delivered, and Insurance News noted SIRA issued several censure letters in 2023. Insurance Business characterised the escalation as stark, with the latest penalty bill nearly 48 times the earlier $10,000 penalty in under two years. ¹⁵³

In March, SIRA imposed special licence conditions on NRMA Insurance after what it described as a series of other self-reported errors, the ABC reported. Sydney Dispatch, citing the greenslips.com.au comparison site, said those conditions, dated March 31, 2026, require an independent review of controls in the insurer's premium management system and a further review within six months of full implementation of the new system. NRMA Insurance had argued a letter of censure would be the more appropriate regulatory response, citing its co-operation and corrective action, Insurance News reported, while Insurance Business reported the insurer cited the special licence conditions already in place. SIRA found penalties warranted given the seriousness of the contraventions and the need for deterrence. The penalties do not replace the insurer's obligations to complete customer remediation and comply with the special licence conditions, and the insurer can seek a NSW Civil and Administrative Tribunal review of the decision. ²⁶⁵³

One related matter remains unresolved. The ABC previously revealed NRMA Insurance had underpaid about 400 victims of motor vehicle accidents after incorrectly calculating their weekly benefits, an error spotted by a crash victim's lawyer rather than the insurer. SIRA has not determined a penalty for that breach because it is still investigating. NRMA Insurance, which is a separate entity from the NRMA, did not say whether it disputed SIRA's determination. ²⁶

Yahoo Finance reported the penalty figure as $497,500 in relation to the green slip overcharging, which differs from the $479,500 total stated in SIRA's letter as reported by the ABC, Insurance News, Insurance Business and CarExpert; the discrepancy is not resolved in the reporting, and the lower figure is consistent with the eight-penalty total described in the regulator's letter. ⁴²⁵³¹