APRA bans insurance executive

SYDNEY – A former executive of Zurich Australia Insurance and Zurich Financial Services Australia has been disqualified from acting as a director or senior manager of a general insurer by the Australian Prudential Regulation Authority (APRA).

APRA said Florian Salzgeber, who was an executive of Zurich from January 1999 to May 2003, misled auditors as to the true nature of financial reinsurance transactions. Salzgeber was a member of the financial team responsible for capital management and APRA reporting.

The two financial reinsurance transactions with General & Cologne Re Group Australia, undertaken in 2000, resulted in Zurich Australia Insurance's profits in that year being overstated by $61 million, with the effect that the firm appeared to meet the regulatory solvency requirement when it did not.

APRA deputy chairman Ross Jones said that APRA relies on officers in responsible positions within regulated entities to act with integrity and honesty at all times and will take action to remove those who do not act in this way from APRA's regulated industries. APRA said it is still considering the fitness and propriety of other people involved in the transactions.