The WA Government will impose a 5% levy on its workers’ comp premiums to cover expenses relating to the collapse of HIH. The impact on states where HIH was a direct workers’ comp underwriter will become clearer over the next couple of weeks.

The NSW Government has also announced relief from stamp duty on insurance policies replacing those arranged with HIH. How it’s going to do that it hasn’t worked out yet, although NIBA Chief Executive Noel Pettersen suggested it could be through an ex gracia payment. The relief measure is intended to apply to all policyholders, business – including companies – as well as domestic.

Premier Bob Carr, who is taking a great interest in the collapse of a major corporate citizen, has also suggested a levy on all policies to cover the shortfall on HIH claims. Although suggestions of a levy on all policies were made by at least one senior industry figure immediately after the HIH collapse, it was swiftly buried by the Insurance Council – presumably because members didn’t want it.

We may not have heard the last of the levy proposal, however. As the extent of the collapse becomes clearer and tales of resulting hardship and bankruptcy emerge, the levy solution may become politically irresistible. While insurers have picked up the vast majority of HIH’s business, the questions of unpaid claims and the lack of a solution to the problem of unplaced business remain on the agenda.