The Australian Prudential Regulation Authority (APRA) today announced that on 6 February 2007 it decided to disqualify Mr John Butler 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 Butler subsequently sought APRA’s reconsideration of its decision and at the same time applied to the Administrative Appeals Tribunal (AAT) for a stay of APRA’s decision to disqualify him, pending completion of APRA’s reconsideration.
On 15 February 2007 the AAT ordered that the operation of APRA’s decision to disqualify Mr Butler be stayed until 2 March 2007 when the reconsideration must be completed.
Mr Butler held a number positions at Zurich Australia Insurance Limited (ZAIL) including Chief Financial Officer from March 1999 to December 1999, General Manager of General Insurance from December 1999 to October 2001, Chief Operating Officer from October 2001 to March 2002, Chief Executive Officer from March 2002 to July 2004 and a director from March 2002.
On 25 May 2005, APRA accepted an enforceable undertaking from ZAIL and Zurich Financial Services Limited 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.
APRA is continuing to consider the fitness and propriety of other individuals in relation to these transactions.
A description of the disqualification process, including the appeal process, can viewed on APRA’s website. Click here for more details. A copy of the Enforceable Undertaking from Zurich can also be viewed here. APRA’s prudential standards can 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.