The HIH Royal Commission will have cost the Australian taxpayer about $40 million by the time it is wound up later this year. The Federal Government has made an additional allocation of $21.4 million for the current financial year, with additional funding allocated for financial assistance for legal and related witness expenses.

The royal commission spent its three sitting days last week concentrating on the FAI financial reinsurance contracts, with extensive cross-examination of FAI officers, particularly Niram Peiris, who was FAI’s Financial Controller. Mr Peiris, who is now the Finance Director at Allianz, said he was not shown a report by FAI actuary Geoff Trehair in February 1998 that calculated FAI’s PI shortfall at $91 million.

He alleged he was not made aware of a number of developments related to the controversial financial reinsurance contracts which enabled FAI to record losses as profits.

Mr Trehair told the royal commission yesterday that FAI’s account for the year ended June 30, 1998 were “probably inaccurate”. He said details of FAI’s loss-making PI business in the US weren’t entered in the company’s Aegis computer system. He found a shortfall of $91 million.