On Tuesday, ASIC confirmed that the Federal Court imposed the penalties after finding the companies had engaged in “misleading and deceptive conduct when selling travel insurance by failing to correctly state how premiums were calculated and by allowing insurance to be sold to ineligible customers”.
It was also found that Allianz customers were not given accurate information on the travel insurance they were purchasing and that Allianz and AWP failed to prevent the sale of insurance on Expedia websites to consumers who were ineligible to make claims under the policies.
“ASIC is committed to improving the outcomes for Australian consumers who purchase insurance. The insurance industry needs to be transparent and accurate when selling and promoting their products,” ASIC deputy chair Sarah Court said.
“The community expects that the insurance industry will promote and sell products in a transparent way. People take out travel insurance for peace of mind and to protect their families. 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.”
Allianz was ordered to pay $360,000 and AWP $1,140,000.
Chief Justice Allsop noted in the Court’s decision: “In circumstances where the contraventions arose from careless omissions and failure to closely monitor the sale of insurance products on partner websites (namely, the Expedia websites), where the loss or damage caused to customers was largely unquantifiable, but where the contravening companies are large, powerful companies that have demonstrated a corporate culture failing to give primacy to compliance with financial services laws, the proposed penalties fall within the appropriate range to deter Allianz and AWP from engaging in similar conduct in the future, and to deter the sector more generally from adopting a lax attitude towards compliance.”
Allianz and AWP were charged back in February after ASIC alleged that, between 2016 to 2018, Allianz and AWP published information online, including on Allianz’s domestic, basic and comprehensive travel insurance web pages, which misrepresented the characteristics or level of coverage of travel insurance on sale to consumers.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
