Former Zurich Australia CEO John Butler could be forced out of the insurance industry after the Australian Prudential Regulation Authority (APRA) found him responsible for two suspect reinsurance transactions in 2000.

It has banned him from acting as a director or senior manager of any Australian general insurer or local agent of a foreign underwriter.

Mr Butler has taken the matter to the Administrative Appeals Tribunal, which has ordered APRA to conduct a review of its decision before Friday.

The regulator says the contracts resulted in Zurich overstating its profit for that year by $61 million. They also made Zurich seem to meet minimum solvency requirements when its reserves were below par.

Mr Butler was Zurich’s GM of Insurance at the time, becoming CEO in 2002.

APRA says it is continuing its investigation of the transactions and has not ruled out disciplinary action for other individuals involved.