Stephen Burroughs, a former manager of a general insurer whose conduct in the late 90s was found to have contributed to the infamous collapse of HIH, is again able to take up a senior insurance role after his disqualification was revoked by the Federal Court of Australia.
In 2004, the Australian Prudential Regulation Authority (APRA) disqualified Burroughs on the basis he was not a fit and proper person to be, or act as, the holder of a senior insurance role pursuant to s 25A(1) of the Insurance Act 1973 (Cth) (the Act). This decision was based on the applicant’s conduct in a number of reinsurance transactions which effectively concealed the insurer’s under-provisioning from auditors (it was the subsequent unexpected losses suffered by HIH as a result of this under-provisioning which was found to have substantially contributed to its collapse).
Allsop CJ made it clear APRA’s views will be afforded significant weight by the Court when determining whether to revoke the applicant’s disqualification pursuant to s 26 of the Act, due to the mutual trust and collaboration required between APRA and senior members of the insurance industry. However, despite some opposition from APRA, Allsop CJ considered the applicant’s continued, diligent, career in the insurance industry for over 17 years after being disqualified; his recognition of his wrongdoing, and his refined understanding of ethical standards, were sufficient grounds for his disqualification to be revoked.
Burroughs v Australian Prudential Regulatory Authority  FCA 775