IAG has proposed selling its NRMA Insurance home and motor portfolio renewal rights in WA and investing $20 million in resilience initiatives to assure the competition regulator its planned RAC acquisition is in the public interest.

The company will make RAC home products available in the state’s north – including Karratha, Port Hedland and Broome, where insurance can be hard to access – and is proposing further commitments and accountabilities on RAC product pricing and competitiveness.

“RAC has chosen to partner with IAG to ensure its insurance offering to members is sustainable into the future, benefiting from our scale, technology and global reinsurance arrangements,” CEO Nick Hawkns said.

“We are committed to creating this strategic alliance and are making substantial commitments to RAC, its members and all Western Australians.”

IAG announced the proposed $1.35 billion takeover of the RAC underwriting operations – along with a 20-year distribution agreement – in May last year.

It was rejected by the Australian Competition and Consumer Commission in December, with the insurer then reapplying under a new acquisitions assessment regime that started in January.

Last month, the ACCC again opposed the deal, finding it would give IAG overall market shares in WA of about 55%-65% in motor and about 50%-60% in home and contents. It found a “remedy offer” put forward by IAG was insufficient.

IAG says the public benefits assessment phase, introduced with the new regime, is expected to be completed in December, subject to any extensions.

If the ACCC continues to oppose the transaction, IAG and RAC will seek a review through the Australian Competition Tribunal, which has left open hearing dates from March 30.

IAG says the net impact of the RAC alliance and the transfer of the NRMA Insurance home and motor policies in WA would be an additional $1.2 billion in annual gross written premium.

The competition remedies and public benefit commitments do not alter the strategic rationale of the deal and expected financial implications remain consistent with those outlined when it was announced last year, the company says.

IAG expects to incur between $15 million and $25 million in annual integration costs over the next three years. With reinsurance synergies, it expects $100 million in annual pre-tax synergies after integration.