Hih Insurance Case
HIH Insurance Liquidation and Breach of Duty by Directors
Background
There are few surprises when it comes to insurance, but when they do come; they nearly always bring bad news. Such was the demise of HIH Insurance Limited (HIH): both a surprise (to many) and very bad news for many policyholders.
On Thursday, 15 March 2001, HIH received approval from the NSW Supreme Court to place HIH into provisional liquidation. Tony McGrath of KPMG was appointed as provisional liquidator to HIH and 17 of its controlled entities. Provisional liquidation is a temporary form of administration that gives HIH time for the provisional liquidators to review HIH operations and assess the financial position.
HIH insurance is now in runoff, which means it is managing its outstanding claims and not writing any new business. This could take several years to complete; some have suggested as long as 10 years. …show more content…
HIH wrote many types of insurance in Australia, the USA, and the UK. In Australia, this includes compulsory insurance (such as workers' compensation and compulsory third party motor vehicle) and noncompulsory insurance (such as home contents and travel insurance).
According to the HIH 2000 Annual Report the company had gross premium revenue of $2.8 billion, total assets of $8.0 billion, total liabilities of $7.1 billion, with net assets of $900 million.
Affected
Background
There are few surprises when it comes to insurance, but when they do come; they nearly always bring bad news. Such was the demise of HIH Insurance Limited (HIH): both a surprise (to many) and very bad news for many policyholders.
On Thursday, 15 March 2001, HIH received approval from the NSW Supreme Court to place HIH into provisional liquidation. Tony McGrath of KPMG was appointed as provisional liquidator to HIH and 17 of its controlled entities. Provisional liquidation is a temporary form of administration that gives HIH time for the provisional liquidators to review HIH operations and assess the financial position.
HIH insurance is now in runoff, which means it is managing its outstanding claims and not writing any new business. This could take several years to complete; some have suggested as long as 10 years. …show more content…
HIH wrote many types of insurance in Australia, the USA, and the UK. In Australia, this includes compulsory insurance (such as workers' compensation and compulsory third party motor vehicle) and noncompulsory insurance (such as home contents and travel insurance).
According to the HIH 2000 Annual Report the company had gross premium revenue of $2.8 billion, total assets of $8.0 billion, total liabilities of $7.1 billion, with net assets of $900 million.
Affected