The Australian Prudential Regulation Authority (APRA) today announced the disqualification of Mr John Stanbridge 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.
From November 1999 to November 2001, Mr Stanbridge was Chief Financial Officer of Zurich Australian Insurance Limited.
On 25 May 2005, APRA accepted an enforceable undertaking from Zurich Australian Insurance Limited (ZAIL) and Zurich Financial Services Australia Limited (ZFSA) arising from two financial reinsurance transactions with General & Cologne Re Group Australia (GCRA) that were undertaken in 2000. At that time 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 found that Mr Stanbridge was involved in a transaction which was designed to give the false appearance that ZAIL had improved its financial position in 2000 by about $60 million through entry into a reinsurance agreement between ZAIL and GCRA in September 2000. Mr Stanbridge acknowledged that he was involved in:
- the preparation and presentation of accounts which did not reflect ZAIL’s true financial position, and
- deceiving ZAIL’s auditors, APRA and Standard and Poor’s about the effect of the reinsurance agreement.
APRA Deputy Chairman, Mr Ross Jones, said that APRA requires that officers in responsible positions within regulated entities must ensure that APRA is given a full and complete picture of matters bearing on the entity’s solvency and its compliance with capital requirements. “Withholding information to convey a misleading impression of the entity’s financial position is unacceptable as it impacts on our ability to best protect the interests of Australian policyholders,” he said. “APRA will rigorously pursue breaches of prudential requirements and take appropriate action.”
APRA’s assessment of other individuals’ actions involved in the transactions is continuing. The disqualification of Mr Stanbridge is listed on the Disqualification Register on APRA's website. Click here for more details.
A copy of the Enforceable Undertaking from Zurich can also be viewed here.
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.