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

Mr Gosling was Group Reinsurance Manager at HIH Insurance Ltd (HIH) from 1995.

APRA found that despite being aware of agreements and documentation changing the nature of a complex ‘reinsurance’ arrangement entered into by HIH with Hannover Re in 1999, Mr Gosling failed to disclose the true nature of the overall transaction to the HIH Reinsurance Committee or Board.

The transaction was subsequently improperly booked in HIH’s 1999 accounts overstating the insurer’s financial position.

In July 1999, while responsible for the preparation and lodgement of reinsurance returns to APRA, Mr Gosling also incorrectly advised APRA that there were no changes to HIH’s reinsurance arrangements, without taking reasonable steps to ensure that the Hannover Re arrangements and negotiations were fully disclosed to APRA.

APRA’s Deputy Chairman, Mr Ross Jones, said that the regulator expects the senior management of authorised insurers to ensure that reinsurance arrangements are properly reported and booked, and that boards, auditors and APRA are fully informed about any matters likely to materially affect an insurer’s financial position.

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.