Royal Commission into HIH Insurance

Announced by Prime Minister John Howard on 21 May 2001. Justice Neville John Owen of the Supreme Court of Western Australia was appointed by Letters Patent of 8 August 2001, which were revoked and replaced by fresh Letters Patent on 29 August 2001, issued by Governor-General Peter Hollingworth on the advice of the Howard government. He was to inquire into the failure of HIH before the appointment of provisional liquidators on 15 March 2001, the conduct of its directors, officers, auditors and advisers, possible breaches of law, the performance of regulators and the adequacy of prudential supervision of general insurance, co-operating with ASIC’s parallel investigation; the report was originally due by 30 June 2002.

Legislation: Royal Commissions Act 1902

1. 29 August 2001Letters Patent of 8 August 2001 revoked and replaced by new Letters Patent with a wider definition of the HIH group and declarations under the Royal Commissions Act and the Income Tax Assessment Act.
2. 6 February 2002Letters Patent amended to extend the inquiry to the decisions and actions of any other person.
3. 2 May 2002Reporting date extended from 30 June 2002 to 28 February 2003.

The report on the failure of HIH was delivered to the Governor-General on 4 April 2003 and released on 16 April 2003 with the government’s response. It referred possible breaches of law to prosecuting agencies, several HIH executives were later convicted and imprisoned, and its recommendations led to reforms of the prudential regulation of general insurance.

• Inquiry into the causes of the failure of HIH Insurance
• Inquiry into corporate governance and possible breaches of law
• Review of the regulation and prudential supervision of general insurance

Last in the portfolio of Department of the Treasury.

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