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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuary banned

The consulting actuary to HIH Insurance, David Slee, has been disqualified by the Australian Prudential Regulation Authority (Apra) from ever acting as a general insurance actuary again. Mr Slee, who was described in the HIH Royal Commission as ‘the definitive compliant actuary’, was an old friend of HIH chief executive Ray Williams. In 2000, the year before the insurer collapsed, Mr Slee’s actuarial consulting company was getting 80 per cent of its work from HIH.

Apra announced this month that Mr Slee did not meet the ‘fitness and propriety’ requirements set out in Apra’s prudential standards under the Insurance Act of 1973, which focus on competence and not honesty. Apra, which came in for significant criticism itself over its failure to keep a close eye on HIH in its last two years of operation, stated that Mr Slee had used ‘unrealistic assumptions in his capacity as consulting actuary to HIH to arrive at an unreasonably low estimate of the group’s claims liabilities’. It also said that he had allowed his independence to be compromised.

HIH collapsed in March 2001 with an estimated deficiency of A$5.3bn, which was Australia’s biggest corporate failure.

Mr Slee did not attract specific negative recommendations from the HIH Royal Commission. Commissioner Neville Owen said it was the board’s fault that it never examined his reports, although he was constrained by his position as a consultant from being more proactive.

Mr Slee is now retired after more than 40 years in insurance. His conduct has also been referred to the Institute of Actuaries Australia.