The Australian Prudential Regulation Authority (APRA) today announced that the Administrative Appeals Tribunal (AAT) has upheld APRA's decision to disqualify Mr David Slee from holding any appointment as an actuary of a general insurer under the Insurance Act 1973.

Mr Slee was a consulting actuary to the HIH Group of companies from January 1997 to the time of the HIH collapse in March 2001.

APRA announced the disqualification of Mr Slee on 16 September 2004. The decision to disqualify Mr Slee was based on his use of unrealistic assumptions in his reports to HIH, specifically the use of low estimates of the HIH Group's claims liabilities and the uncritical acceptance of management data.

APRA also found that Mr Slee allowed his independence to be compromised.

Mr Slee applied to the AAT on 25 October 2004 for a review of the disqualification.

The AAT made its decision on 6 March 2006 and will publish it at http://www.aat.gov.au. 

The AAT was satisfied that, among other things, Mr Slee:

• failed to comply with the relevant actuarial code;
• "failed to exercise the professional care and diligence expected of a reasonable and competent actuary"; 
• "displayed a gross disregard for his professional obligations"; and
• had not demonstrated the competence to meet the relevant standards and regulations set by APRA.

The AAT agreed with APRA's position that actuarial reports must comply with professional standards to ensure they provide an accurate and informed picture of the financial health of the insurance company concerned.

The Tribunal concluded: "The manner in which the Applicant undertook his work was devoid of the appropriate degree of care. He made significant errors that should not have been made. He failed to identify those errors this demonstrating not only a lack of reasonable care in the performance of his work, but a deficiency in his work practises. The Applicant failed to exercise the professional care and diligence expected of a reasonable and competent actuary."

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