The Australian Prudential Regulation Authority (APRA) has announced the disqualification of Mr Ross Eade from being or acting as a director or senior manager of a general insurer under the Insurance Act 1973.

Mr Eade held various senior management positions in the HIH Insurance Limited group (HIH) between October 1972 and March 2001, including General Manager Finance from August 1995 to April 1999, and Operations Director, Corporate Divisions from April 1999 to March 2001.

APRA found that Mr Eade failed to act in the best interests of HIH and its policyholders by:

• advising HIH’s external actuary, Mr David Slee, to remove cautionary remarks from a version of his year end actuarial assessment for December 1997 concerning the risks associated with excluding a prudential margin from the liability estimate;
  
  
• signing a January 1998 letter from HIH formally instructing Mr Slee to exclude a prudential margin from his December 1997 liability valuation; and
  
  
• failing to alert the HIH Board of the risks associated with excluding a prudential margin from the liability valuations when he knew, or should have known, that the absence of a prudential margin unduly increased the risk of falling into insolvency

APRA’s Deputy Chairman, Mr Ross Jones, said that senior insurance executives had to perform their duties with an appropriate degree of care, caution and prudence.

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 $2.0 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.