The Australian Prudential Regulation Authority (APRA) has banned former Zurich Australia Insurance Limited (ZAIL) chief executive Malcolm Murray Jones almost six months after the regulator announced its investigation into the group had concluded.

A director and chief executive of ZAIL from 1998 until 2002, Jones was also a director of Zurich Financial Services Australia (ZFSA).
APRA investigated staff after accepting an enforceable undertaking from ZAIL and ZFSA on May 25 2005.

The move came following two financial reinsurance transactions with General & Cologne Re Group Australia, which resulted in ZAIL's profits being overstated by $61 million.

The net effect of this overstatement was that ZAIL appeared to meet regulatory solvency requirements, when materially it did not.

Jones was found to have been aware of the purpose and effect of the two financial reinsurance transactions, knowingly facilitated the transaction and misled the ZAIL Board and ZAIL's auditors regarding the effect of the transaction.

Jones has been banned 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.

Under APRA rules Jones can appeal to have the disqualification cancelled at a later date, an APRA spokesman said.

The regulator has disqualified a further five Zurich staff, including another former ZAIL chief executive John Butler, and accepted an enforceable undertaking from one other since starting investigations into the Zurich business in May 2004.

The conclusion of the investigation was announced by APRA on March 14.