The Australian Prudential Regulation Authority (APRA) today announced that it has disqualified Mr Malcolm Murray Jones from being or acting as a director or senior manager of a general insurer, authorised non-operating holding company or agent of a foreign general insurer.
Mr Jones was a director and Chief Executive Officer of Zurich Australia Insurance Limited (ZAIL) from 1998 until 2002. Mr Jones was also a director of Zurich Financial Services Australia Limited (ZFSA) during that time.
APRA concluded that Mr Jones:
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was aware of the purpose and effect of a transaction with General & Cologne Re Group Australia (GCRA) that was undertaken in 2000 and resulted in ZAIL’s profits being overstated by $61 million, with the effect that ZAIL appeared to meet the regulatory solvency requirement when it did not;
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knowingly facilitated the transaction; and
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misled the ZAIL Board and ZAIL’s auditors regarding the effect of the transaction.
On 25 May 2005, APRA accepted an enforceable undertaking from ZAIL and ZFSA arising from two financial reinsurance transactions with General & Cologne Re Group Australia. At that time APRA said:
“While the undertakings resolve APRA’s issues from the investigation in relation to ZAIL and ZFSA, APRA is still to consider what action, if any, it needs to take in relation to individuals who were involved in these transactions. APRA is satisfied that ZAIL more than adequately meets minimum regulatory capital requirements and that policyholders’ interests are adequately protected.”
Mr Jones’ disqualification finalises APRA’s assessment of individuals arising out of its investigation into Zurich Australia Insurance Limited. The conclusion of the investigation was announced in APRA’s media release of 14 March 2007 - see http://www.apra.gov.au/media-releases/07_10.cfm.
APRA has disqualified or accepted an enforceable undertaking from seven former Zurich executives, including Mr Jones. The others are:
The disqualifications of Salzgeber, Stevenson, Butler and Parsonson were confirmed by APRA upon review and are now the subject of reviews by the Administrative Appeals Tribunal.
The disqualification of Mr Jones is listed on APRA’s Disqualification Register at www.apra.gov.au/Disqualification-Register.cfm.
A copy of the Enforceable Undertaking from Zurich can be viewed at www.apra.gov.au/Media-Releases/05_31.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:
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
