THE SCOPE OF ETHICS AND THE NATURE OF ETHICAL OBLIGATIONS

There are few surprises when it comes to insurance, but when they do come they nearly always bring bad news. Such was the demise of HIH Insurance Limited (HIH): both a surprise (to many) and very bad news for many policyholders.

On Thursday, 15 March 2001, HIH received approval from the NSW Supreme Court to place HIH into provisional liquidation. Tony McGrath of KPMG was appointed as provisional liquidator to HIH and 17 of its controlled entities. Provisional liquidation is a temporary form of administration that gives HIH time for the provisional liquidators to review HIH operations and assess the financial position.

HIH insurance is now in run?off, which means it is managing its outstanding claims and not writing any new business. This could take several years to complete; some have suggested as long as 10 years.

HIH comprised several separate government?licensed insurance companies, including HIH Casualty and General Insurance Limited, FAI General

This shift that has occurred in the public and organisational views of ethical behaviour is an indicator of the overall shift occurring in society. Less and less focus is placed on profit and performance over everything else, with a new view towards sustaining the environment and accepting responsibility for the role business plays in social responsibility. The triple bottom line has become an important indicator of quality and integrity within an organization and is part of the growing implicit responsibility that business has in general to the world around them. Within accounting and finance particularly, there needs to be a high level accountability of action, much the same as those within the manufacturing industry and their environmental obligations and responsibilities.

Shareholders of HIH are likely to incur significant losses on their investment, perhaps their entire capital. The extent of these losses will be revealed over time.

Insurance Company Limited (FAI), CIC Insurance Limited (CIC) and World Marine and General Insurances Limited (WMG).

ASIC cited a $10 million payment from a HIH-controlled company, HIHC, to Pacific Eagle Equities, a company wholly owned by Mr Adler. The payment, made on the day Pacific Eagle was registered as a company, was used to buy $3,973,397.34 worth of shares in HIH, which were later sold at a loss.

Some topics in this essay:
Ethical Egoism, Arthur Anderson, Regulation Authority, Regulatory Authority, Rodney Adler, Corporations Law, McGrath KPMG, Insurance Act, Shareholders HIH, HIH Australian-authorised, collapse hih, ethical behaviour, rodney adler, provisional liquidation, corporations law, insurance company, nsw supreme court, hih collapse, supreme court, australian prudential, financial position, claims met event, prudential regulation authority, 15 march 2001, australian prudential regulation,