Federal Govt help for HIH policyholders
The federal Government is set to help bail out those people hardest hit by the HIH collapse. The new plan proposed yesterday could cost the Government over $500 million.
In a turnaround from last week when the Government supported the idea of a 1 per cent levy imposed on all policyholders, Prime Minister Howard said the Government would pay Australia’s insurance companies commissions to take over existing policies as well as pay out some of the claims.
However not all claims will be funded by the federal Government. People insured under state law such as worker’s compensation, compulsory third party and some builder’s insurance as well as overseas policyholders will not have their claims met by the federal Government. The Government will seek to bail out the hardest hit cases first.
The Government has also offered $5 million for an investigation into the HIH collapse by the Australian Securities and Investments Commission and to help speed up legislative reforms for the insurance industry. The federal Government is also seeking a review to introduce nationwide schemes for compulsory third party, worker’s compensation and builder’s warranty insurance.