History’s biggest fine on Allianz Insurance, $6 billion to be paid

The world’s top insurer has been fined $6 billion, or about Rs 46,000 crore, for misleading customers and making wrong investments, the largest ever fine on an insurance company in history.

For information, let us tell you that European insurance and financial services provider Allianz has been fined more than 6 billion on its US Asset Management Unit in a fraud case that surfaced at the beginning of the Corona epidemic. Allianz is the fourth largest company in the world by revenue, the seventh largest in terms of net premiums and the world’s largest in terms of total assets. This company is affiliated to Bajaj Company in India.

The Allianz agreement with the US Department of Justice and the Securities and Exchange Commission (SEC) is considered the largest deal in corporate history. The SEC, which indicted Allianz and three of its former senior portfolio managers, said Allianz was involved in a massive fraud scheme. The fraud was exposed in a market crash during the March 2020 corona pandemic. In this market crash, Allianz lost billions of dollars in this strategy. Investor documents were rewritten to reduce the risky nature of structured alpha investing.

Following the proceedings, Allianz US Asset Management Unit agreed to pay approximately $1 billion to the SEC to settle the case, and to pay $5 billion to the victim of this fraud along with its parent company, Allianz. Pension funds for teachers, clergy, bus drivers and engineers are among a total of 114 institutional investors who are victims of the aliens scam. Interestingly, Allianz posted a total operating profit of €3.2 billion in the first quarter of 2022.