Allianz Australia Insurance and AWP Australia have been ordered to pay a combined $1.5 in fines by the federal court for “misleading and deceptive conduct” when selling travel insurance, according to a statement put out by ASIC Tuesday morning.
The court found Allianz and AWP – both owned by Germany-based Allianz SE – incorrectly stated how travel insurance premiums were calculated and sold insurance policies to ineligible customers.
The charge of failing to prevent the sale of insurance to customers who were ineligible to make claims under those policies is an example of the kind of mis-selling the government is trying to prevent with the design and distribution obligations, which are scheduled to commence in October after being pushed back from the original April 5 date due to the pandemic.
“The community expects that the insurance industry will promote and sell products in a transparent way,” commented ASIC deputy chair Sarah Court.
“The value of an insurance policy is in the promise – that a consumer can feel confident and secure that they will be looked after if something goes wrong. ASIC remains committed to ensuring that consumers’ experience matches that expectation.”
In his decision, chief justice Allsop delivered a warning for product manufacturers that is strongly connected to the incoming ‘D&D’ rules, which will require them to issue and stick to a determined target market.
“In circumstances where the contraventions arose from careless omissions and failure to closely monitor the sale of insurance products… [for] large, powerful companies that have demonstrated a corporate culture failing to give primacy to compliance with financial services laws, the proposed penalties… deter the sector more generally from adopting a lax attitude towards compliance.”