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Slater and Gordon launches class action against NAB, MLC for "worthless" credit card insurance

Australian law firm Slater and Gordan have taken aim at bank NAB on behalf of clients who were allegedly sold worthless credit card insurance. Click here to read more. The concept of worthless insurance is one worth watching - it is not far from a class action like this one to determining value on the basis of claims ratios. That may well be useful in some circumstances - but could be excessively reductive in others. Insuring something rare on a one-off basis often requires charging a premium so high that the loss ratio is arguably very low - and yet it could be very valuable to have such cover. One-off event cover can fall into this category, as can insurance of professional athletes and models. In those cases the buyers of cover can usually afford to get good advice, of course. Gap insurance, on the other hand, in an example from the Australian Royal Commission, is a poor value product routinely sold to car buyers alongside lending. If the claims ratio were known more widely, it probably would not be sold in anything like the volumes that it is. I will watch the progress of this action with interest.

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