At the turn of the century there was a bit of strife at the NMRA – as the New York Times describes:
Though the roots of the strife go back years, the current outbreak of fighting first flared last month, when Nicholas Whitlam resigned as chairman of the NRMA Insurance Group, a former mutual insurer whose customer rosters now include about one in five Australians.
Rowan Ross, who was elected interim chairman, then dismissed the chief executive, Eric Dodd, saying that a majority of the board had lost confidence in Mr. Dodd.
So those are the basic facts. Mark Latham – then MP for Werriwa – raised the issue in the Parliament:
This matter also involves a question of ministerial responsibility. Not only has Minister Hockey stood by and allowed this injustice to occur; remarkably, he has acted in Mr Dodd’s defence. In fact, he has gone out of his way to protect Dodd’s interests within the NRMA. The minister even went as far as personally intervening to prop up Mr Dodd’s position as managing director.
On the weekend of 7 and 8 April, there was media speculation that the board of NRMA Insurance was reviewing Mr Dodd’s position. The following Monday, Rowan Ross, the acting Chairman of NRMA Insurance, received a call from Minister Hockey advising him not to sack Dodd. After Dodd was, in fact, dismissed on 10 April, Ross received a further call from Mr Hockey, in which he said, `Remember that I am in charge of ASIC.’ Ross took this to be a threat and subsequently told many people of the minister’s actions. It was subsequently reported in the media that the minister had given Ross `the rounds of the kitchen’. Minister Hockey has acted improperly, and perhaps even illegally, by intervening in this fashion.
To be complete – Latham did make a whole series of other allegations.
As a minister, I took the view that Australia could ill afford to have the caucus-like bar room brawl in the boardroom of NRMA spread to the executive of NRMA at a time when the largest general insurer in Australia was under pressure with the collapse of the second largest general insurer in Australia. I rang the acting chairman of NRMA and asked him if the speculation was true: that he and the board had done a deal to dismiss the chief executive of NRMA at the request of Mr Whitlam, who had resigned. He would not respond to me. I reminded him that at that juncture the chief executive of NRMA was also the chairman of the Insurance Council of Australia and was working with the government on a rescue package for thousands of policyholders in HIH, who at that time had no protection whatsoever. In fact, the insurance industry at that moment was working with the government to come up with a solution to respond to the immediate problems of HIH. At that point of time, it was decided within the board of NRMA that they were going to take their bar room political brawls into the executive of NRMA and potentially destabilise Australia’s largest general insurer.
I do not apologise for one second for making it obvious to the NRMA, both publicly and privately, that the government, through its prudential regulator, APRA, and through its corporate regulator, ASIC, would carefully monitor developments at NRMA to ensure that good corporate governance was adhered to. I do not apologise for that. That is what any prudential and responsible minister would do to ensure that all appropriate laws were complied with by the board and by the executive of NRMA at a time when the insurance industry was under enormous pressure.
That’s what Hockey told the Parliament in September 2001.
In May 2001 he told a conference (emphasis added):
Insurance, generally has performed reasonably in this regard however, given recent events I have asked both ASIC and APRA to pay particular regard to the current board and management instability at NRMA.
NRMA is Australia’s largest general insurer. While APRA advise me that there is no prudential concerns with NRMA, I am concerned that recent board infighting is doing damage to NRMA and damage to the general insurance industry.
Well – all that can now be seen in a different light given Hockey now boasting in his biography:
I said Rowan, I am sending everyone down to NRMA tomorrow and they’re going to give you an enema like you’ve never had. And I rang ASIC and APRA and the ACCC — all the regulators — and I said I want you to raid the NRMA publicly and I want it to have the enema it’s never had. I rang the Tax Office, too, and said you go through the joint.
So you sool the corporate regulators and the Australian Tax Office onto an organisation because you’re worried about in-house brawling? To avoid damage to the “NRMA and damage to the general insurance industry” and at a time when “the largest general insurer in Australia was under pressure with the collapse of the second largest general insurer in Australia” you order government regulators to give that company “the enema it’s never had”. Really?