HIH rescue package announced

The Federal Government has announced a rescue package for victims of the HIH Insurance collapse which will see policyholders with outstanding claims receive all or most of what's owed to them.

The Government has also bowed to pressure and agreed to a Royal Commission to report on both the insurer’s failure as well as the regulation of the insurance industry.

The $500 million hardship package will help fund claims made by individual Australians and small businesses. Claims made by non-Australian residents and businesses with over 50 employees will not qualify for the Federal Government's rescue payments.

The NSW State Government also announced its own $600 million rescue package. This is to be partly funded by a $69 million tax imposed on the insurance companies. The likely result of this will be an increase in premiums for policyholders.