The Australian Prudential Regulation Authority (APRA) has announced the disqualification of Mr Charles Abbott from being or acting as a director or senior manager of a general insurer.

APRA also announced the disqualification of Mr Geoffrey Trahair from holding an appointment as an actuary of a general insurer or acting as a director or senior manager of a general insurer.

Mr Abbott and Mr Trahair were found deficient under the ‘fitness and propriety’ requirements set out in APRA’s prudential standards under the Insurance Act 1973, specifically that “the person has adequate experience and demonstrated competence and integrity in the conduct of business duties.”

Mr Abbott was an alternate director at HIH Limited (HIH) from August 1995 to May 1997, a non-executive director from May 1997 to 2001 and Deputy Chairman from January 2001. APRA found that he had:

• failed to properly perform his duties as a director and avoid potential conflicts of interest arising from his directorship;
• acted improperly and with misconduct in seeking payment of monies while knowing that HIH was about to be placed into provisional liquidation; and
• had not sought to prevent the payment of an intermediary fee in the knowledge that HIH was about to be placed into provisional liquidation.

Mr Trahair was employed at FAI as an actuary from February 1998 and as the National Workers Compensation Manager from September 1998 and later at HIH after its acquisition of FAI. APRA found that Mr Trahair was aware that FAI was significantly under reserved and participated in withholding pertinent data from PricewaterhouseCoopers, FAI’s external actuaries, which resulted in FAI’s liabilities at June and December 1998 being significantly understated. The matters of Mr Trahair’s conduct and APRA’s conclusions have been referred to the Institute of Actuaries Australia.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry.APRA is funded largely by the industries that it supervises. It was established on 1 July 1998.APRA currently supervises institutions holding approximately $2.0 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.