Article

Note: In connection with the Insurance Act of 1973, the Australian Prudential Regulation Authority (APRA) requires maintenance of a minimum solvency level by each licensed company and submission of quarterly account statements for audit by the APRA. As a condition of the acquisition of Cotesworth Group Ltd. (Cotesworth) by Applicant Insurance Group (Applicant), Lloyds of London required that Applicant provide LCs totaling AUD$129,000,000 to assure the payment of Cotesworth's insurance obligations. Applicant obtained the LCs from Westpac and Societe Generale Australia Limited (Issuers) and secured its obligations to them with cash deposits and securities.

Terrence Kevin Cassidy, the managing director of Applicant, was charged and convicted of filing two account statements with the APRA that failed to disclose Applicant's financial obligations to Issuer, in violation of APRA Rules and the Insurance Act of 1973. He was sentenced to 9 months.

[JEB/ees]

COPYRIGHT OF THE INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE

The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.