The Australian Prudential Regulation Authority (APRA) today announced the disqualification of Mr Robert Stevenson from being or acting as a director or senior manager of a general insurer, authorised non-operating holding company or agent of a foreign general insurer.
Mr Stevenson held the position of Group Reinsurance Officer within Zurich Re, Zurich from 1999 to 2001.
On 25 May 2005, APRA accepted an enforceable undertaking from Zurich Australia Insurance Limited (ZAIL) and Zurich Financial Services Australia Limited (ZFSA) arising from two financial reinsurance transactions with General & Cologne Re Group Australia that were undertaken in 2000. The transactions resulted in ZAIL’s profits in 2000 being overstated by $61 million with the effect that ZAIL appeared to meet the regulatory solvency requirement when it did not. On 25 May 2005 APRA said:
“While the undertakings resolve APRA’s issues from the investigation in relation to ZAIL and ZFSA, APRA is still to consider what action, if any, it needs to take in relation to individuals who were involved in these transactions. APRA is satisfied that ZAIL more than adequately meets minimum regulatory capital requirements and that policyholders’ interests are adequately protected.”
APRA determined that Mr Stevenson played a key role in facilitating, structuring and completing a reinsurance transaction between ZAIL and the General & Cologne Re Group, which was designed to give the misleading appearance of ZAIL having significantly improved its financial position in 2000 and, in particular, to give the appearance of an improvement in ZAIL’s solvency position.
APRA found that Mr Stevenson knowingly facilitated the transaction and in so doing enabled ZAIL to deceive its auditors, APRA and Standard and Poor’s as to the true nature and effect of the transaction.
APRA is continuing to consider the fitness and propriety of other individuals involved with these transactions.
The disqualification of Mr Stevenson is listed on APRA’s Disqualification Register at www.apra.gov.au/Disqualification-Register.cfm. A copy of the Enforceable Undertaking from Zurich can be viewed at www.apra.gov.au/Media-Releases/05_31.cfm.
APRA’s prudential standards can be viewed at www.apra.gov.au/General/General-Insurance-Prudential-Standards-and-Guidance-Notes.cfm
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 $2.5 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.
Media and industry inquiries only:
Andrew McCutcheon, Public Affairs Manager
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660
All other inquiries:
APRA Contact Centre
1300 131 060
