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Australian court orders Allianz pay $1.1 million penalty for travel insurance sales

Stock MarketsSep 06, 2021 09:25PM ET
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© Reuters. FILE PHOTO: Flags with the logo of Allianz SE, Europe's biggest insurer, are pictured before the company's annual shareholders' meeting in Munich, Germany May 3, 2017. REUTERS/Michaela Rehle

(Reuters) - An Australian court fined local units of Allianz (DE:ALVG) SE for selling travel insurance to ineligible customers and not properly disclosing how it calculated premiums on Expedia (NASDAQ:EXPE) websites, the country's corporate watchdog said.

Two units of German insurer Allianz were on Monday fined a total of A$1.5 million ($1.12 million) in a civil case https://www.reuters.com/article/us-australia-regulator-allianz-idUSKBN26L14J brought by the Australian Securities and Investments Commission (ASIC) in September last year.

The units, Allianz Australia and AWP Australia, committed A$10 million in October last year to compensate around 31,500 customers who were sold potentially incorrect travel insurance through Allianz's own website and Expedia, ASIC said.

Allianz Australia issued the travel insurance while AWP handled its sale.

"The insurance industry needs to be transparent and accurate when selling and promoting their products," ASIC Deputy Chair Sarah Court said in a statement.

ASIC said the court took into consideration the early admission by the Allianz companies in deciding the penalty.

The German company said it self-reported the matter in 2018 and did not contest the penalty sought by the ASIC.

"Allianz and AWP welcome the finalisation of this matter," Allianz said in an emailed statement.

The two units also face separate criminal charges https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-029mr-criminal-charges-laid-against-allianz-and-awp-alleging-the-making-of-false-statements for allegedly making inaccurate statements between 2016 and 2018 when selling both domestic and international travel insurance.

($1 = 1.3444 Australian dollars)

Australian court orders Allianz pay $1.1 million penalty for travel insurance sales
 

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