NRMA Insurance has been sanctioned for breaching NSW compulsory third party scheme guidelines.

The move comes after customers were charged motor premiums that were not approved by the State Insurance Regulatory Authority and policyholders did not receive intended discounts or got inaccurate refund amounts.

SIRA has imposed special licence conditions on the company “due to multiple self-reported failures in [NRMA Insurance’s] systems”.

The regulator says the failures “constitute breaches of the motor accident guidelines and cause financial harm to customers”.

One licence condition requires the insurer to start an independent review of controls in its third-party policy premium management system, report to SIRA and make any improvements identified.

The other condition requires NRMA Insurance to conduct a further review within six months of full implementation of a new third-party policy premium management system.

“[NRMA Insurance] has demonstrated commitment to remediation of current issues and improving their control environment moving forward,” SIRA said.

“SIRA will closely monitor ... performance and compliance with these conditions and the ongoing remediation of impacted customers, and expects [the insurer] to establish and maintain effective systems and controls to meet its regulatory obligations and promote trust in the scheme.”

IAG-owned NRMA Insurance is one of six authorised CTP providers in the NSW scheme.

A spokesperson for IAG says NRMA “takes its compliance obligations seriously and is committed to addressing SIRA’s concerns. The matters raised were surfaced during [the] transition from its legacy system to the new policy system (Enterprise Platform).”

NRMA has already moved to address the self-reported issues, the spokesperson says. Steps include a root cause analysis and engaging independent experts to review operational and system controls.

“The migration to the new technology platform will resolve many of the issues that were identified and support a more resilient future operating environment,” the spokesperson said.