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APRA disqualifies former Zurich executive
The Australian Prudential Regulation Authority (APRA) has signalled that it is continuing to investigate the fitness and propriety of individuals involved in transactions undertaken by Zurich Australia Insurance Limited (ZAIL) in 2000 after announcing the disqualification of a former Zurich executive, Florian Salzgeber.
The regulator said it had disqualified Salzgeber 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.
It said Salzgeber was an executive of Zurich Australia Insurance Limited and Zurich Financial Services Australia (ZFSA) Limited from January 1999 to May 2003, and a member of their financial team responsible for capital management and APRA reporting.
On May 25, 2005, APRA accepted an enforceable undertaking from ZAIL and SFSA arising from two financial reinsurance transactions with General & Cologne Re Group Australia that were undertaken in 2000. The transactions resulted in ZAIL’s profits in 2000 being overstated by $61 million, with the effect that ZAIL appeared to meet the regulatory solvency requirement when it did not.
APRA said Salzgeber had been the holder of a senior manager role at ZAIL/ZFSA within the meaning of the general insurance prudential standard and that it had found that he had “knowingly acted on improper directions from others in ZAIL and ZFSA, and in so doing caused the auditors of ZAIL and ZFSA to be misled”.
APRA said it had concluded that Salzgeber did not demonstrate the requisite “integrity in the conduct of business duties” as required in the prudential standard.
AUTHOR
Mike Taylor
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