The Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen MP, today announced that the Government expects claims under the HIH Claims Support Scheme (the scheme) to be finalised by the end of the year and that the Government intends to wind up the Scheme on finalisation of claims.
"Since the scheme began operation in July 2001 it has received 16,000 applications for assistance which resulted in 10,900 eligible claims. Less than 280 claims remain to be finalised and it is expected that most of these claims will be settled by the end of this year," Mr Bowen said.
"It is a priority for the scheme to finalise the remaining claims as quickly as possible, so that the remaining assistance can be paid and the Scheme wrapped up.
"The scheme has always operated within the broader framework of the liquidation. It is important that the scheme is dismantled to simplify the liquidation processes.
"The Australian Government will continue to work closely with the HIH liquidators to finalise the remaining claims."
The scheme was established in 2001 in response to the collapse of HIH to provide financial assistance to eligible HIH policyholders.
The scheme is a unique response to an exceptional event and was built on close cooperation between the Insurance Council of Australia, the insurance industry, the HIH liquidators and the Australian Government which funds the scheme.
Building on the recommendations made by the HIH Royal Commission in 2003, the Government recently announced a package of measures to assist depositors and policyholders in getting early access to funds – so that Australian families can continue to meet day to day costs while the liquidation of an institution is carried out.
This will remove the need for ad hoc arrangements established in the wake of financial institution failure and provide customers with certainty in the unlikely event of a future collapse of a general insurer or bank.
20 June 2008