An Australian unit of German insurer Allianz sold travel insurance that misleadingly promised unlimited emergency medical cover wherever people were even though the policies had limits on both cost and location, reports Reuters citing revelations made at an inquiry into misconduct by the insurance sector.
The Royal Commission heard that Allianz’s website led people to believe the firm offered unlimited cover for emergency medical services overseas, when in fact the cover had a A$1,000 ($715) limit, and that cover applied wherever they travelled, when there were restrictions on locations covered.
Under questioning during the inquiry on 17 September, Allianz’s general manager of retail distribution Michael Winter said it had misled clients who purchased travel insurance products through its website.
The policies had been sold on Allianz’s website since December 2015 and, even though the firm’s solicitors raised concerns about the advertising claims at that time, were only removed earlier this year.
Documents submitted at the inquiry showed Allianz declined a suggestion by its solicitors to spend up to A$30,000 in a thorough review of the whole website.
“This is demonstrative, I want to put to you, of Allianz not prioritising compliance, and compliance with the law,” said Ms Rowena Orr, a lawyer assisting the inquiry, and Winter agreed.
Allianz told the corporate regulator ASIC in August that it had sold over two million travel insurance policies during the period from December 2015 till June 2018, including about 10% through direct sales. It told the inquiry on Monday it had not yet contacted affected customers about any remediation.
Earlier, Australia’s biggest listed wealth manager AMP said it had charged life insurance premiums to dead customers even after concerns over the practice were raised by a staff member.
AMP’s disclosures heaped further pressure on one of the country’s biggest financial institutions which previously revealed it had charged thousands of customers for financial advice it never gave, then doctored a supposedly independent report to the corporate regulator about it.
AMP is not the only major Australian company to admit to charging dead client accounts. Commonwealth Bank of Australia and National Australia Bank, the nation’s No.1 and No.4 lenders, have told the inquiry they had done the same.