Australia's competition watchdog started legal proceedings against Nib Holdings Ltd. unit NIB Health Funds Ltd. for allegedly engaging in misleading conduct and making false representations to its members.

The Australian Competition and Consumer Commission said NIB Health Funds failed to notify members in advance of its decision to remove certain eye procedures from its MediGap Scheme in 2015.

Previously, members were able to obtain these eye procedures without paying out-of-pocket costs if doctors participated in the scheme. Between June 2011 and October 2016, NIB Health Funds represented to its members that several of its policies covered eye procedures and that members did not have to pay out-of-pocket expenses, the ACCC alleged.

NIB Health Funds allegedly made the representation by paying gap amounts on behalf of members for these eye procedures. NIB Health Funds also failed to provide direct advance notice of any changes that would affect their entitlement to the benefits under the policies.

The ACCC is seeking penalties, corrective notices and costs, among others, against NIB Health Funds.