The Australian Prudential Regulation Authority (APRA) has demonstrated the length of its regulatory reach by joining with the British Financial Services Authority to bar an insurance executive based in Ireland from holding an executive position in the industry for five years.

APRA says John Byrne was involved in several financial reinsurance contracts between 1998 and 2001 as a senior employee of Cologne Reinsurance, a subsidiary of Gen Re.

The regulator says Mr Byrne knew the contracts lacked sufficient risk transfer to be accounted as reinsurance.

APRA did not detail the transactions, but they are believed to include contracts between Cologne Re and FAI in 1998 that helped convert a pre-tax loss of $50 million into an $8.6 million profit.

FAI was sold to the HIH Insurance group early in 1999 for $300 million – a figure based on the overstated accounts.

Mr Byrne has also agreed to assist APRA with its continuing investigations into the role of other personnel involved in the transactions. In return, the regulator has agreed to take no further action against Mr Byrne in respect of its investigations.

APRA Deputy Chairman Ross Jones says the investigation into financial reinsurance products developed and marketed by parts of the Gen Re Group identified three transactions in which Mr Byrne knowingly contributed to products whose design made them capable of being misused by a counterparty for an improper purpose.