Minister for Financial Services & Regulation, Joe Hockey and the Insurance Council of Australia today announced the formation of a new non-profit company called HCS (HIH Claims Support Pty Ltd) to process the Government support package for HIH policyholders in hardship.
"The industry and Government have worked through the difficult issues and have resolved that this structure will deliver support as fast as possible.
"I welcome the industrys significant logistical support in this exercise and it means we can get on with defining the detailed criteria for support as soon as possible," Minister Hockey said.
Mr Hockey said the non-profit company, set up and run by the industry, would oversee and administer the Commonwealth Governments assistance package.
"Todays agreement is a big step forward in helping the plight of needy HIH policyholders.
"Unlike the States, the Commonwealth Government has no existing infrastructure that is able to process the tens of thousands of claims from existing HIH policyholders. The non-profit corporation gives us a practical framework using existing industry infrastructure and expertise to help HIH victims," Mr Hockey said.
The HIH provisional liquidator, Mr Tony McGrath, has given his in principle agreement to the structure.
ICA President, Mr Raymond Jones said the company would be managed by a senior insurance industry executive.
"It will be responsible for the processing of claims determined by the Federal Government as being entitled to protection.
"Action will then be taken to make arrangements for those claims to be handled by an insurer as quickly as possible."
Mr Jones said the companies initially involved were Royal & SunAlliance, NRMA, QBE and Allianz. Details of other companies who may be involved would be announced in the next few weeks.
"The new company will effectively sub-contract claims work to these companies who are able to provide services to support claimants and provide hardship relief.
"Funds for payment of claims will be made available by the Commonwealth Government, as announced on Monday.
"There is still a significant level of detail we need to work through with the Government including the eligibility criteria, but this resolution of the framework is real progress."
Mr Jones said compulsory third party (personal injury) and workers compensation claims would continue to be handled under current agreements with Nominal Defendants and Nominal Insurers in the respective states and territories.
"The insurance industry will provide all the necessary services to the new company on a non-profit basis."
Mr Hockey said he was pleased the industry had adopted a co-operative and responsible approach to assisting in the HIH failure.
"The company will stay in existence for as long as is necessary to provide assistance to people suffering hardship as a result of the HIH failure," he said.