(Reuters) -Australia’s prudential regulator said on Thursday it has scrapped the additional capital requirement of A$150 million ($101.64 million) placed on the local unit of Allianz SE after finding the insurer has rectified its risk governance issues.
The Australian Prudential Regulation Authority (APRA), in August 2019, required Allianz Australia to initially set aside an additional A$250 million. This requirement was lowered to A$150 million in December 2020.
Allianz Australia in March 2021 submitted to the regulator a court-enforceable undertaking that it would rectify the risk management shortfalls, which APRA said the company has now completed.
“We are pleased to see the significant progress Allianz has made in addressing APRA’s concerns, although we have emphasized that these weaknesses should not have happened and we will not tolerate any recurrence,” said APRA Deputy Chair Helen Rowell.
The APRA decision also comes nearly a year after an Australian court separately levied a combined A$1.5 million fine on two units of Allianz for not properly disclosing how they calculated insurance premiums for some customers.
($1 = 1.4758 Australian dollars)
(Reporting by Harshita Swaminathan and Tejaswi Marthi in Bengaluru; Editing by Arun Koyyur)