Privatised ACC takes a knock
HIH's $1 billion collapse is a giant warning for supporters of privatised accident compensation.
Monday, March 19th 2001, 12:06AM
HIH in New Zealand says it is unaffected by the collapse of its stock exchange listed parent company in Australia.
HIH in Australia announced on Friday that it had appointed a provisional liquidator following major losses totalling nearly $1 billion (A$800 million).
The company's managing director in New Zealand, Ross Chapman, says the local operations enjoy a strong position which will be strengthened from June 1 when a new joint venture with QBE Insurance kicks off.
He says the New Zealand assets are not included in the liquidation following a move made in December last year to create a separate financial profile for the local business.
"KPMG, who have been appointed as statutory liqudators for HIH, have confirmed that the sale of HIH NZ to QBE...will proceed as planned.
"Earlier this week HIH and QBE signed a shareholder agreement for a joint venture," Chapman says in a statement.
This deal include the transfer of all the insurance assets and liabilities of the HIH and QBE NZ operations (except FAI run offs) to the joint venture.
Standard and Poors, on Friday, reaffirmed HIH NZ's A- credit rating.
Meanwhile, the president of the Council of Trade Unions, Ross Wilson, says the collapse HIH is a giant warning for supporters of privatised accident compensation.
"The collapse of one of the most active insurer lobbyists for privatisation of New Zealand's ACC scheme.... HIH Insurance is a grim warning for the opposition political parties and employers organisations who continue to support privatisation," he says.
"HIH had two Australian lobbyists in New Zealand in 1998 and 1999 helping the National Government privatise our accident compensation scheme and HIH is, through a subsidiary, one of the registered workers compensation insurers in New Zealand."
"Injured New Zealanders should have the security of knowing that their rehabilitation and compensation will be in the hands of a well run government agency and not left to the financial uncertainties and "scandals" of the private insurance markets," Wilson says.
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