Political critics who thought the Government’s schedule for the HIH Royal Commission was overly long should think again. The deadline of June 30 2002 is already worrying insurers, who don’t believe the royal commission will be able to cover all the issues in this timeframe.

Speaking at an HIH Claims Support seminar in Sydney last week, ICA Executive Director Alan Mason said he is  “sceptical” that the commission will have done its job in time. Canberra sources have also pointed out the possibility of the royal commissioner reporting to an ALP federal government. In that case, he’s unlikely to get an extension if he needs more time to investigate the states’ ragged approach to statutory insurance schemes.

While last week’s seminar was called mainly to reveal how HIH Claims Support Ltd will operate – a second conference is being planned for Melbourne next week – it also served to highlight a number of associated issues.

Not least among these is the fact that no one knows yet how much money will have to be provided by the Federal Government to settle claims under its rescue package. HIH Provisional Liquidator Tony McGrath wasn’t prepared to put a figure on it, although qualified industry sources have suggested the $640 million outlaid by the Government will be well shy of the final amount.

HIH continues to shrink in size as Provisional Liquidator Tony McGrath advances the company’s “run off”. There are now only 300 HIH staff remaining of the previous 3000, and HIH’s 57 offices have now been condensed to eight. Mr McGrath wants to cut the offices to as few as two or three within the next couple of months.

Admitting that “numbers will change regularly”, Mr McGrath confirmed that HIH’s losses didn’t just occur in the last 12 months. In fact, exactly when the company became insolvent is still the subject of “painstaking analysis”.