The Australian Prudential Regulation Authority (APRA) has disqualified Mr William Szuch from working as an appointed actuary under the Life Insurance Act 1995.
APRA found that Mr Szuch acted unprofessionally by failing to perform properly the functions and duties of an appointed actuary in relation to three friendly societies. In particular, APRA found that Mr Szuch failed properly to apply actuarial standards established under the Life Insurance Act 1995.
Mr Szuch’s actions in a number of matters raised concerns, with APRA’s major concern being with Mr Szuch’s assessment of the resilience reserve for several of the benefit funds of the friendly societies. A resilience reserve is the amount that the benefit fund needs to hold in case of a shock to the economic environment, such as an increase or decrease in interest rates.
The actuarial standards require an appointed actuary to consider the financial effects of a prescribed set of scenarios on the assets and liabilities of a benefit fund in order to determine the amount of reserve that should be set aside within the benefit fund to provide against the risk that those scenarios will occur. Mr Szuch, however, did not consider all of the scenarios required by the actuarial standards and thus breached the standards, with the result that solvency and capital adequacy requirements were incorrectly calculated. APRA also found that Mr Szuch failed properly to document the reasons for his approach. Other matters were also taken into consideration in making the decision to disqualify Mr Szuch.
APRA Deputy Chairman Ross Jones said that actuarial standards were established by the Life Insurance Actuarial Standards Board to ensure all actuaries apply a consistent approach when assessing the adequacy of a life company’s or friendly society’s reserves.
"The effectiveness of the prudential regulator’s supervision of regulated entities is critically dependent on the accuracy, reliability and completeness of the statutory reports required by law," Mr Jones said.
APRA was satisfied that no member of any friendly society was adversely affected by Mr Szuch’s actions.
The disqualification of Mr Szuch is listed on the Disqualification Register on APRA's website. Click here for more details.
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.