The Australian Prudential Regulation Authority has disqualified Robert Stevenson, former group reinsurance officer of Zurich Re, 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.
On 25 May 2005, the regulator accepted an enforceable undertaking from Zurich Australia Insurance and Zurich Financial Services Australia arising from two financial reinsurance transactions with General & Cologne Re Group Australia that were undertaken in 2000.
The transactions resulted in Zurich Financial Services Australia's profits in 2000 being overstated by $61m with the effect that Zurich Australia Insurance appeared to meet the regulatory solvency requirement when it did not.
In 2005 the regulator said it was satisfied that Zurich Australia Insurance more than adequately met minimum regulatory capital requirements and that policyholders' interests were adequately protected.
APRA determined that Stevenson played a key role in facilitating, structuring and completing a reinsurance transaction between Zurich Australia Insurance and the General & Cologne Re Group, which was designed to give the misleading appearance of the company having significantly improved its financial position in 2000 and, in particular, to give the appearance of an improvement in ZAIL's solvency position.
The regulator found that Stevenson knowingly facilitated the transaction and in so doing enabled Zurich Australia Insurance to deceive its auditors, the regulator and Standard and Poor's, as to the true nature and effect of the transaction.
The regulator is continuing to consider the fitness and propriety of other individuals involved with these transactions.
