The Australian Prudential Regulation Authority (APRA) has announced the disqualification of Mr Robert Stitt QC 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 in Australia.
Mr Stitt was a non-executive director of HIH Insurance Limited (HIH) and its predecessors between 20 January 1992 and 15 March 2001. He was also a member of the HIH Audit Committee from 1992 until 2001 and the Human Resources Committee from its inception in 1993. In October 1998 he also became a director of HIH Investment Holdings Ltd., a subsidiary of HIH.
APRA found that Mr Stitt failed to exercise his powers and discharge his duties with the degree of care and diligence required of a person in the positions he held.
Specifically, APRA found that Mr Stitt failed in his duty as a director by not requiring appropriate analysis by management or external consultants before approving:
- the re-purchase of CareAmerica Health and Liability Insurance;
- the acquisition of FAI Insurances Limited; and
- a joint venture arrangement with Allianz Australia Insurance Limited.
APRA also found that Mr Stitt:
- failed to place himself in a position to adequately understand and consider the provisioning of outstanding claims liabilities;
- failed in his duty as a member of the HIH Audit Committee by approving a misleading note in the 2000 financial statements relating to a National Indemnity Company contract; and
- failed to perform his duties as a director in relation to HIH Investment Holdings Ltd.
APRA Deputy Chairman Ross Jones said APRA considers the role of non–executive directors critical in ensuring the proper governance of companies.
“APRA expects that all directors of general insurers will ensure a high standard of corporate governance is maintained, that boards are properly informed and that board committees function properly,” Mr Jones said.
To date APRA has disqualified 26 individuals in connection with HIH, five of whom are currently subject to Administrative Appeals Tribunal appeal. A further three individuals are still subject to assessment.
The disqualification of Mr Stitt is listed on APRA’s Disqualification Register which can be viewed on APRA’s website at www.apra.gov.au/Disqualification-Register.cfm.
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.
Media and industry inquiries only:
Andrew McCutcheon, Public Affairs Manager
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660
All other inquiries:
APRA Contact Centre 1300 131 060
