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ASIC files charges against Allianz, subsidiary

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The corporate regulator has pressed ahead with criminal proceedings against Allianz and its subsidiary AWP for allegedly making false or misleading statements to customers who were sold travel insurance products between 2016 and 2018.

A spokesman for Allianz says as the matter is now before the court, it will not provide any comment.

But the spokesman told insuranceNEWS.com.au the insurer has “acknowledged the shortcomings in relation to the sale of travel insurance products on some websites” that were identified during the Hayne royal commission in 2018.

“A review undertaken by Allianz in 2018 highlighted issues relating to the identification or description of the limits, sub-limits and exclusions that would apply to particular policies,” the spokesman said. “The website content has since been addressed.

“Since the royal commission, Allianz has undertaken a comprehensive program to strengthen our organisational governance, including further investing in risk and compliance and refining our product offerings with the aim of achieving the best outcomes for our customers.”

Last week the Australian Securities and Investments Commission (ASIC) announced it has filed charges against Allianz and AWP, accusing them of engaging in misconduct to sell travel insurance products.

Allianz was the underwriter of the products and AWP the distributor that sold the policies to customers. The insurer faces seven counts of false or misleading representations and AWP has one similar charge against it.

The charges allege that Allianz and AWP “published information online, including on Allianz’s domestic, basic and comprehensive travel insurance web pages, that misrepresented the characteristics or level of coverage of travel insurance on sale to consumers,” according to a statement from ASIC.

“In some instances, ASIC alleges that Allianz’s website advertised the maximum travel insurance benefits payable to customers, but failed to state that particular sub-limits, terms, conditions or exclusions could operate to limit those benefits.”

The case is listed for further mention on April 20 after the two companies appeared last week at the Downing Centre Local Court in Sydney.

The criminal proceedings come after the regulator announced last October it had secured $10 million in remediation from the insurer and AWP for travel insurance products that were “potentially mis-sold” to some 31,500 customers. The products were sold through Allianz’s own website and its distribution partners including Expedia.

The remediation is not an admission by either Allianz or AWP that they have breached the law.

ASIC says the criminal charges are part of its regulatory responses after the Hayne royal commission referred the insurer’s alleged misconduct to the regulator. The charges are separate to the civil proceedings lodged in the Federal court against Allianz and AWP for allegedly misleading consumers on Expedia travel websites.