The Administrative Appeals Tribunal (AAT) has affirmed the disqualification by the Australian Prudential Regulation Authority (APRA) of Mr Stephen Burroughs 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 Burroughs held the position of Group Reinsurance Manager at FAI General Insurances Limited (FAI) from 1996 to 1999. He reported to Daniel Wilkie, former director of FAI and former manager of FAI’s general insurance and the commercial and professional insurance divisions. Mr Burroughs was involved in a reinsurance transaction entered into by FAI with General & Cologne Re Australasia Limited (GCRA), in an effort to obtain reinsurance to deal with FAI’s provisioning difficulties. The HIH Royal Commission concluded that HIH’s takeover of FAI in 1999 substantially contributed to the collapse of HIH and that HIH incurred unexpected losses as a result of under-provisioning in FAI.
APRA reviewed Mr Burroughs’ conduct in respect of the GCRA transaction. On the basis of its findings, APRA disqualified Mr Burroughs on 18 November 2004, on the ground that he was not a fit and proper person to hold a senior position with a general insurer. Mr Burroughs requested APRA to review his disqualification and made a separate application to APRA to revoke it. APRA confirmed his disqualification and refused Mr Burroughs’ application for revocation. Upon a subsequent application by Mr Burroughs, APRA reconsidered and confirmed its decision not to revoke his disqualification.
On 11 February 2005 and 13 December 2006, respectively, Mr Burroughs commenced two separate proceedings against APRA at the AAT, seeking review of APRA’s decisions to disqualify him and to refuse to revoke the disqualification. Both applications were heard together in Sydney on 15, 16 and 17 November 2007. The AAT confirmed (see http://www.austlii.edu.au/au/cases/cth/aat/2007/1960.html) APRA’s decisions to disqualify and to refuse to revoke the disqualification. The AAT concluded that at the relevant time Mr Burroughs was, and at present remains, a person who is not fit and proper to discharge the responsibilities of a senior manager.
On 28 June this year APRA announced the conclusion of its investigation into various financial reinsurance transactions entered into by General Reinsurance Australia (see http://www.apra.gov.au/media-releases/07_21.cfm). APRA is continuing to consider the fitness and propriety of other individuals involved with these transactions.
The disqualification of Mr Burroughs is listed on APRA’s Disqualification Register 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 $3 trillion in assets for 21 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.
