The Australian Prudential Regulation Authority (APRA) today announced that it has disqualified Mr Alan Parsonson 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 Parsonson was Regional Manager of Australia/Pacific for Zurich Insurance Company (ZIC) and a director of Zurich Australian Insurance Limited (ZAIL) and Zurich Financial Services Australia Limited (ZFSA) during 2000 and 2001.
The APRA delegate concluded that:
Mr Parsonson knowingly procured ZIC’s approval of ZAIL’s entry into a reinsurance contract designed to give the false appearance that ZAIL had significantly improved its financial position and solvency in 2000; and
Mr Parsonson’s conduct enabled ZAIL to mislead APRA, ZAIL’s auditors and ratings agencies.
On 25 May 2005, APRA accepted an enforceable undertaking from ZAIL and ZFSA arising from two financial reinsurance transactions with General & Cologne Re Group Australia in 2000. The transactions resulted in ZAIL’s profits in 2000 being overstated by $61 million with the effect that ZAIL appeared to meet its 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 is continuing to consider the fitness and propriety of other individuals involved with these transactions.
The disqualification of Mr Parsonson is listed on the Disqualification Register on APRA's website. Click here for more details.
A copy of the Enforceable Undertaking from Zurich 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.