APRA disqualifies former Zurich executive
A former group reinsurance officer of Zurich Financial Services Australia has been permanently disqualified from employment as a director or senior manager of a general insurer for his role in falsely inflating profits of Zurich Australia Insurance Limited (ZAIL) in 2000.
The Australian Prudential Regulation Authority (APRA) yesterday ruled that Robert Stevenson had “knowingly facilitated” a reinsurance transaction between ZAIL and General & Cologne Group Australia that presented a misleading appearance of ZAIL’s financial position.
Stevenson, who held his position from 1999 to 2001, was found to have effectively enabled ZAIL to deceive its auditors, as well as APRA and researcher Standard & Poor’s over the “true nature and effect of the transaction”.
APRA also announced yesterday that it is “continuing to consider the fitness and propriety of other individuals” involved in the transaction, which resulted in Zurich profits being overstated by $61 million, making ZAIL “appear to meet the regulatory solvency requirements, when it did not”.
On May 25, 2005, the regulator accepted an enforceable undertaking from both ZAIL and ZFSA arising from the transaction.
It subsequently issued a statement that it was “satisfied ZAIL more than adequately meets minimum regulatory capital requirements and that policy holders interests are adequately protected”.
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