Health insurance firm Bupa Australia and financial services' comparison site iSelect have agreed that the latter should modify its advertising claims and make a donation to Bupa's medical research fund, the
Sydney Morning Herald reported.
A cross-claim by iSelect against Bupa was dismissed.
Bupa had alleged, in a case before the Federal Court of Australia, that iSelect made comparisons that were false or misleading because iSelect did not, in fact, conduct a thorough comparison of health insurers.
Bupa asserted that iSelect compared only the products of 12 of the 35 registered health insurers that pay iSelect a fee to offer their products. This comparison did not include Bupa or Medibank Private, Australia's largest health insurers.
Bupa also contended that "through the operation of a quota system, iSelect does not offer the products of some participating health insurers, once...[they have] already sold a certain number of policies during a particular period."
The companies reached a settlement last week through court-ordered mediation.
iSelect has undertaken to refrain for three years from stating that it compares "most" or a "wide" range of health insurance products and funds, unless this is the case, the SMH reported.
It will also refrain from repeating comments on potential savings or stating that customers won't have to re-serve waiting periods on new policies.
In addition, iSelect will make a donation to the Bupa Foundation, Bupa's medical research fund. The amount has not been disclosed.
In December, the Australian Securities and Investments Commission warned operators of insurance and credit comparison websites "of the need to ensure they comply with their obligations under consumer protection laws."
iSelect also provides comparison services on banking products. It bought a rival, Infochoice, in 2011.