Allianz, AWP to pay total of $16.8m for criminal charges over travel insurance
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The news: AWP Australia must pay penalties of $3.3 million and Allianz Australia Insurance must pay $13.5 million after pleading guilty to criminal charges of making false or misleading claims linked to domestic and international travel insurance products.
Allianz had pleaded guilty to six charges, while AWP pleaded guilty to a single charge.
The numbers: Guilty pleas by both companies led to a 25% discount in the penalties.
The maximum penalty for each breach of the Corporations Act was the greater of:
- $8.1 million
- Three times the total value of the benefits obtained by each offence
- If the court cannot determine that value, 10% of the company's annual turnover during the 12-month period ending at the end of the month when when an offence was committed.
The context: The Commonwealth Director of Public Prosecutions pursued legal action against the companies following an Australian Securities and Investments Commission (ASIC) investigation.
ASIC previously secured $10 million in customer remediation from Allianz and AWP for potentially mis-sold travel insurance sold to around 31,500 customers through Allianz's website and distribution partners, including Expedia.
A separate ASIC lawsuit against Allianz and AWP ended in a $1.5 million cumulative penalty against the companies, with AWP forced to pay $1.14 million and Allianz, $360,000 in 2021.
The source: Supreme Court of New South Wales
