Eminent Victorian lawyer Peter Rashleigh will be “most surprised” if there are no claims against insurance brokers arising out of the placement of cover with HIH in the latter stages of its life.

Mr Rashleigh, the Chairman of law firm Phillips Fox, told the NIBA Convention in Adelaide that the industry-managed HIH Claims Support Scheme would no doubt reduce the extent of that risk, but “there are plenty of disappointed insureds who do not qualify under that scheme who will be looking carefully” at the issue of broker involvement.

He said it is the responsibility of the broker to make reasonable and sufficient enquiries that a policy is underwritten by responsible and solvent insurers. But there would not be a breach of duty if there was no reason to suppose that the selected underwriter was not solvent when insolvency was only proven by events that happened after the loss.

“In situations where there is objective evidence giving rise to case for concern, it is the obligation of the broker to warn the client and recommend that cover be placed with a more financially stable insurer,” he said.