Australian court fines Hollard A$2m in the first good-faith penalty against an insurer

In context: this report covers a source published on 9 Oct 2026.

The Federal Court of Australia has ordered Hollard Insurance Partners, formerly Commonwealth Insurance (CommInsure), to pay a A$2m penalty for breaching its duty of utmost good faith under section 13 of the Insurance Contracts Act 1984, the Australian Securities and Investments Commission (ASIC) said. The ruling was reported on 9 October. ASIC chair Sarah Court called it the first civil penalty ordered against an insurer for that breach. ASIC had asked for A$30m, insuranceNEWS.com.au reported.

The case concerned a house in regional Victoria damaged by a storm in October 2021. According to ASIC, Hollard first accepted the roof damage claim, then delayed for 15 months before rejecting it. A structural engineering assessment that the first inspection recommended did not happen until August 2022. Moisture, mould and decay made the house uninhabitable, and it was finally treated as a total loss. In late 2022 Hollard offered a A$1,000 goodwill payment, which the family refused before complaining to the Australian Financial Complaints Authority. Hollard eventually paid A$1.55m, more than three years after the claim was lodged.

Hollard admitted the contraventions. Justice Button said the family had been "given the runaround" and was sharply critical of the eight months it took to appoint an engineer. A barrister quoted by insuranceNEWS.com.au noted that none of the conduct was found to be deliberate or dishonest, yet the cumulative delays were still a breach. Hollard said it had fallen "materially short" of its obligations and has since improved its claims handling.

ASIC said claims and complaints handling failures are one of its enforcement priorities for 2026. Consumer advocates quoted by insuranceNEWS.com.au said the case should inform the revision of the industry's code of practice.