Allianz attempted to “correct” independent reports
Allianz attempted to either change or kill two separate independent reports into its compliance procedures, the Royal Commission has heard, bringing an end to over a day’s worth of testimony showing that the insurer both had non-compliant information on its website and that it failed to rectify the offending content quickly.
Allianz commissioned independent reports by both Ernst & Young and Deloitte into its compliance practices, the former of which was legislatively required by the Australian Prudential Regulation Authority (APRA).
Upon the Deloitte report finding a series of serious and systemic issues with the insurer’s compliance regime, its chief risk officer, Lori Callahan, who commissioned the report, called the report author and asked her to withdraw it.
Callahan testified before the Commission that the problems outlined in the report had been, in her opinion, already addressed, and she “didn’t need to be told to do things that had already been done”.
When asked by Senior Counsel assisting the Commission, Rowena Orr, whether Allianz was trying to manipulate the report to remove less favourable findings, Callahan, in what was a frequent occurrence in her testimony, failed to answer the question directly.
It took an intervention from Commissioner Hayne for Callahan to ultimately admit that “that inference can be drawn” from Allianz’s behaviour regarding the report.
Amongst many issues found by Ernst & Young in the earlier report, the insurer was criticised for being “reactive not proactive” in many areas of compliance. Senior managers at Allianz attempted to get multiple “corrections” to the findings, of which, Callahan testified, some were back by documented factual errors, but others were not.
This, of course, bore similarities to earlier testimony before the Commission in the financial advice hearings, in which Hayne heard that AMP had attempted to change an independent report by law firm Clayton Utz for the Australian Securities and Investments Commission about the wealth firm.
AUTHOR
Hannah Wootton
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