In the face of harsh criticism, Australia’s general insurers are taking consolation from one aspect of the HIH collapse: statutory insurance schemes run by the states will at last come under public scrutiny.

Financial Services and Regulation Minister Joe Hockey has stated several times that the impending Royal Commission into the HIH collapse should also look at the state-run compulsory schemes.

In an interview with Channel 7, Mr Hockey said HIH was one of the last insurers to provide “some forms of compulsory state insurance. That centralises enormous risk in just a handful of companies.

“There are certain classes of insurance that are compulsory because of state legislation.” He said. “The states need to have a long, hard think about that.”

Not that the states haven’t had plenty of opportunity to do some hard thinking in the recent past. Several baulked at a federally imposed review of their statutory schemes’ competitiveness, with some justifications for maintaining their monopolies being judged as less than convincing.