Allianz Australia enters enforceable undertaking with APRA

ALLIANZ AUSTRALIA  has confirmed that it has entered into an enforceable undertaking (EU) with the Australian Prudential Regulation Authority (APRA) to complete the current program of work in relation to Allianz Australia’s risk culture and governance.

This matter was considered as part of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and was the subject of a referral by the Commissioner to APRA.

Working with APRA, Allianz Australia said it recognised the need for reform and has embarked on a significant program of work to enhance its culture, conduct and governance. This involved a significant investment in Allianz Australia’s risk management, compliance, and corporate governance and conduct functions, the company reported.

Allianz SE, Allianz Australia’s parent company, recognised that it did not meet APRA’s expectations for robust oversight by an offshore parent of an APRA-regulated Australian insurance company and has taken vigorous measures to improve governance at its subsidiary, using its role as the ultimate parent of Allianz Australia to support Allianz Australia’s efforts to ensure that the program of reform is delivered.

Allianz Australia noted that its progress in implementing this program underpinned APRA’s decision in December 2020 to reduce from $250 million to $150 million the additional capital requirement applied to Allianz Australia in response to its Risk Governance Self Assessment.

Allianz Australia acknowledged APRA’s view that the effective implementation of the remainder of the program of work would be key to the removal of the remaining $150 million of additional capital.

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