Two former senior executives in the reinsurance industry have withdrawn their legal challenge to their disqualification by the Australian Prudential Regulation Authority (APRA), on fitness and propriety grounds, from being or acting as a director or senior manager of a general insurer or authorised non-operating holding company, or a senior manager or agent of a foreign general insurer.
The abandonment of the challenges brings to an end the disqualification action taken by APRA against six former senior managers of the General Re (GR) group of reinsurers.
APRA announced on 14 October 2004, the disqualification of six individuals, including Mr Geoffrey Barnum and Mr Christopher Byatt, for their role in a financial reinsurance transaction between the group's Australian subsidiary, General & Cologne Reinsurance Australia (GCRA), and FAI Limited (FAI), that they knew had an improper purpose.
This arrangement improperly boosted FAI's 1997/98 Profit and Loss by being disguised as traditional reinsurance transactions and not referring to the fact that the risks for GCRA had been removed through side letters. The arrangement was subject to significant comment in the Report of the HIH Royal Commission.
An appeal to the Administrative Appeals Tribunal (AAT) was lodged by all six individuals in December 2004. Mr Barnum and Mr Byatt withdrew their appeals on 1 March 2006. The other four individuals had previously withdrawn their appeals.
Although APRA's disqualification decision has remained in force, the decision by Mr Barnum and Mr Byatt to withdraw their challenges from the AAT concludes APRA's disqualification action for these individuals.
Mr Barnum was employed at GCRA as Managing Director and Mr Byatt was employed at GCRA as General Manager - Finance and Secretary. Both were suspended by their employer upon disqualification.
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 $2.2 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.
Media and industry inquiries only:
Stuart Snell, Head of Public Affairs
Australian Prudential Regulation Authority
Telephone: 02 9210 3384
Mobile: 0407 250 276
All other inquiries:
APRA Contact Centre
1300 131 060
