The misconduct stemmed from inadequate internal compliance processes: court
The NSW Supreme Court fined insurance companies Allianz Australia Insurance Ltd and AWP Australia Pty Ltd a total of $16.8m for disseminating misleading travel insurance information.
The charges stemmed from breaches of s. 1041E(1) and 1311(1) of the Corporations Act. The Commonwealth Director of Public Prosecutions (CDPP) alleged that Allianz published misleading information on six travel insurance landing pages between 2016 and 2018. AWP was charged with a single count related to misleading content on its “Purchase Path,” where consumers could purchase Allianz’s travel insurance.
The court found that Allianz's misleading representations failed to disclose key policy sub-limits and conditions, including limits on cancellation fees, travel delay expenses, and personal liability coverage. AWP’s misleading content contained similar omissions regarding insurance benefits. The court found that both companies ought reasonably to have known that their online content was misleading and could induce consumers to acquire financial products under false impressions.
Both corporations pleaded guilty at the earliest opportunity, acknowledging their responsibility. They also cooperated with the Australian Securities and Investments Commission (ASIC) investigation and implemented a remediation program. As part of their corrective actions, Allianz and AWP refunded over $1.26 million to affected customers and adjusted claims to ensure maximum coverage for policyholders.
The Supreme Court recognised that while the misleading conduct was not deliberate or dishonest, it resulted from inadequate internal compliance processes. Allianz had failed to allocate sufficient resources to review website content, and AWP lacked effective oversight mechanisms. The court emphasised that general deterrence remained a key sentencing consideration, ensuring corporations prioritise compliance over cost-cutting measures.
While the maximum penalties could have reached hundreds of millions of dollars based on turnover calculations, the court determined that the offences fell significantly below the mid-range of seriousness. The fines reflect a balance between the need for deterrence and recognition of the companies’ cooperation and remediation efforts. Ultimately, the ruling underscored the importance of transparency in financial product advertising and the obligation of corporations to ensure accurate disclosure of policy terms.
