Consumers Call for Urgent Review and swift recourse against HIH miscreants
FOR IMMEDIATE RELEASE - January 14, 2003
CONTACT: Natasha Maehara 07 3221 1204 or 0414 783
A consumer body today called for an urgent review of the insurance industry and new laws to simplify and fast track civil claims by affected HIH policy holders against directors, auditors and the Australian Prudential Regulatory Authority (APRA).
Speaking at the launch of a national Insurance Reform Campaign,
spokesperson Natasha Maehara referred to "the ample evidence"
uncovered by the HIH Royal Commission of "corporate dishonesty"
and "woeful government surveillance" that led to the HIH collapse.
"The management of HIH - in their greed to win customers at almost
any cost - caused serious harm to consumers and the insurance market by
pricing premiums down to unsustainable levels," Ms Maehara said.
"When other insurers re-priced policies after the HIH collapse, the
higher premiums included a large extra component to make up for nearly
a decade of operating losses and depletion of reserves."
Referring to the sky rocketing premiums that followed later in 2001and after the events of September 11, Ms Maehara said it was now "beyond dispute that the practices of HIH and the insurance industry itself were a major factor in the Insurance Crisis" and demand full independent investigation.
"Regrettably the only review that did occur - that
rushed through on behalf of the federal government by Justice Ipp in September
- was specifically prevented from examining poor underwriting practices,
the omissions of APRA, the collapse of HIH and predatory premium pricing."
Ms Maehara said. "The revelations of the HIH enquiry effectively
consign the Ipp report to the trash can."
The Insurance Reform Campaign also demands a moratorium on the dismantling
of consumer injury compensation laws that is underway across Australia.
In NSW and Qld the rights of consumers have been swept away or are about to be swept away by legislation that panders to the public relations campaign of insurance companies who blamed the Insurance Crisis on everyone but themselves.
"The ill-considered, knee-jerk reaction by politicians is against the interests of Australian consumers but will reap spectacular financial windfalls for insurers," Ms Maehara said.
The Campaign, which is sponsored by the Civil Justice Foundation and supported by other pro-consumer bodies nation-wide (including the Australian Consumers' Association) will challenge assertions by insurance companies that the obliteration of consumers' injury compensation rights is justified or fair.
The Campaign encourages the public to write to or email their state MPs to protest. "Please don't help insurance companies to profit by punishing people who suffer injuries through no fault of their own" urges the form email which, depending on the state of the resident, is addressed either to the state premier or opposition MPs.
"Unless the current legislative anti-consumer
panic is paused, Insurers will still be collecting huge premiums but the
law changes will allow them to deny responsibility for tragedies that
are the very purpose of an insurance policy in the first place."
The Campaign can be accessed at www.insurancereform.com.au and any person
can send a direct letter of protest to their relevant state MP.
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