Critical EY report revised after Allianz protest

An "independent" EY report that was critical of Allianz's compliance framework was changed after meetings that were "not civil", the Hayne royal commission has heard.

Counsel Assisting Rowena Orr says the draft report submitted in September last year found that compliance personnel were under-resourced, and that the compliance function was reactive, not proactive, and lacked transparency.

Ms Orr referred to communications that suggested a meeting held shortly after between Allianz and EY "was not civil".

She says that EY then agreed to produce another draft version of the report.

Allianz Chief Risk Officer Lori Callahan says this was done because "factual items were identified".

Ms Orr says in mid-October a new draft report was submitted, which gave Allianz an improved rating.

Allianz still was not happy, and a marked up copy of the report was sent back with "extensive comments" added.

The feedback was "starting to wear down EY's patience", Ms Orr suggested.

A further version of the compliance report was sent through in late October, and Allianz was disappointed to see no further rating improvements.

The final report contained information provided by Allianz that was not proven, Ms Orr says.

She asks whether it would have been better to improve compliance rather than "pushing back on the findings of an external report".

"An independent report should be an independent report," Ms Callahan says.

She agrees the Allianz approach to EY was not appropriate.