The Motor Trades Association of Australia (MTAA) has lodged a formal response to Insurance Australia Group's (IAG) draft undertaking regarding its proposed acquisition of RAC Insurance (RACI), warning the ACCC that the proposed commitments remain inadequate to protect repair businesses, consumers and competition in Western Australia.

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MTAA Executive Director Bruce Billson said that while the undertaking adds governance detail, including an independent auditor, a compliance officer, and a complaints handling process, it does not address the practical mechanisms through which insurer market power affects repair businesses and consumers.

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"This undertaking adds compliance paperwork, but it does not address the issues that matter most to the thousands of small repair businesses that service WA motorists every day," Mr Billson said.

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"It is silent on repair pricing, silent on payment terms, silent on consumer choice, silent on network access protections, and silent on the right of repairers to exercise their professional judgement without insurer interference – all significant areas of concern when there is such insurance market domination."

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In its submission, MTAA identifies a fundamental mismatch between the five-year term of the proposed undertaking and the 20-year exclusive distribution agreement that would lock IAG's position behind the RAC brand in Western Australia.

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"A five-year set of behavioural promises against a 20-year commercial arrangement is not a proportionate remedy," Mr Billson said. "For 15 of those 20 years, IAG would operate with none of the transaction-specific constraints the undertaking is supposed to provide."

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MTAA's submission raises serious concerns about the complaints handling process proposed under the undertaking, which would be designed, administered and managed by IAG itself. Repairers who depend on IAG for a large share of their work face a well-documented risk of commercial retaliation and are unlikely to use a process controlled by the dominant market participant against whom their complaints are directed.

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"A complaints process run by the party you're complaining about is not independent oversight, it is selfregulation by another name," Mr Billson said.

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MTAA's primary position remains that the acquisition should not proceed. The competitive harm from removing RACI, Western Australia's leading insurer and a genuinely independent competitive force, is structural and permanent.

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"No combination of behavioural commitments can replicate what RACI brings to the WA market as an independent, member-owned insurer," Mr Billson said.

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Mr Billson noted the broader pattern of insurance market consolidation, with three major motoring club insurance businesses acquired or substantially acquired by national insurers within approximately one year.

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"If this deal proceeds, RACT in Tasmania would be the only member-owned motoring club in Australia that still retains its own general insurance business. These are not transactions that can be reversed," he said.

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MTAA's submission calls for any undertaking to include, at minimum, a duration matching the 20-year distribution agreement, independent complaints handling, repair pricing and payment protections, consumer

choice disclosure, network access safeguards, professional autonomy protections, mandatory MVIRI Code compliance, and annual reporting on repair supply chain outcomes.

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"We reject this undertaking. Small repair businesses cannot be protected by paperwork alone. Accepting it as drafted would mean handing IAG a dominant market position with one hand and offering repair businesses a complaints form with the other," Mr Billson said.

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Read MTAA’s submission in full here: Advocacy & Policy | Motor Trades Association of Australia

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ENDS

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Media contact

Claire Johnson

Motor Trades Association of Australia

M: +61 401 282 550

E: info@mtaa.com.au

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About MTAA

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The Motor Trades Association of Australia (MTAA) is the peak body representing the interests of the

automotive retail sector across the nation. Through proactive engagement, MTAA helps shape sound public

policy on issues that affect the retail motor trades, small businesses and consumers.

MTAA’s member associations include the Victorian and Tasmanian Automotive Chamber of Commerce, the

Motor Trade Association of South Australia and Northern Territory, the Motor Trade Association of Western

Australia, and the Motor Trades Association of Queensland.

At the national level, MTAA acts as a unified voice, representing the interests of the automotive sector to the

federal government and influencing key policy decisions. Its work includes identifying and addressing issues

impacting the sector and advocating for the needs of automotive businesses through ongoing discussions

with government.

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