HIH were put into provisional liquidation which brought there huge obligations to light. The corporate officers, auditors and regulators of HIH failed to see, remedy or report what should have been obvious. And some of those who were in or close to the management of the group ignored or, worse, concealed the true state of the group’s steadily deteriorating financial position. 2. A large quantity of the public were affected by the collapse as HIH was a massive insurance company who would not be able to pay many people out.
Former employees of HIH now found themselves without a job, and left many industries such as building in turmoil as people could no longer supply compulsory home warranty insurance. 3. I think that the main cause of the collapse would be the covering up there losses and writing false statement to balance the situation. A lack of attention to detail, a lack of accountability for performance, and a lack of integrity in the company’s internal processes and systems.
Combined, these features led to a series of business decisions that were poorly conceived and even more poorly executed. 4. A vital part of the work of this Commission has been its deliberations on the future. Everything that can be done should be done to minimise the risk of a collapse of the severity of the HIH failure happening again. Recommendations include the regulation of insurers, structural reform affecting the industry, accounting considerations and management and control of corporations.