Ethics
AN INVESTIGATION OF THE ETHICAL ISSUES THAT ARISE IN THE OPERATION OF A FREE MARKET SYSTEM IN THE HIH COLLAPSETHE SCOPE OF ETHICS AND THE NATURE OF ETHICAL OBLIGATIONSThere 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
Perhaps if alarm bells had been rung at that point, the thousands of shareholders left out of pocket would not have had to deal with the situation as it stands now. According to the HIH 2000 Annual Report the company had gross premium revenue of $2. An independent survey released by the ICAA indicated that of the 1,200 respondents, an overwhelming 98 percent held being ethical and morally fair in their business dealings as very important. When managers, executives or co-workers are unethical, or engage in behaviour that is ethically questionable, the impact can be astonishing in its diversity and extremity. The result would lead to many thousands of innocent investors and employees losing their security and life savings. HIH wrote many types of insurance in Australia, the USA, and the UK. ASIC's powers with respect to liquidation are as follows. One of APRA?s major roles following the collapse of HIH appears to be explaining its role, and whether it made full use of its powers prior to the collapse. Australian Prudential Regulation Authority (APRA)On 15 March 2001, APRA appointed its own inspector to investigate the affairs of HIH and the Australian-authorised insurers in the HIH Group, including the financial condition of the company. Public image is tied very heavily to reputation and ethical behaviour, such as the criticisms of banks for downsizing decisions and service cuts that many feel are unethical. Did the Directors and Managers of HIH conduct the business properly and ethicallyA New South Wales judge froze the assets and multi-million-dollar fortunes of three key figures in the collapsed insurance company HIH. The auditor, Johnathan Pye, from accounting firm Arthur Anderson, must or ought to have been aware of those accounts. And the public can be a powerful activator for social change. The insurer went into provisional liquidation. The authority had been aware before the collapse that HIH needed extra capital to meet new minimum requirements in the industry.
Common topics in this essay:
Ethical Egoism,
Arthur Anderson,
Regulation Authority,
Regulatory Authority,
Rodney Adler,
McGrath KPMG,
Insurance Act,
Corporations Law,
Shareholders HIH,
HIH Australian-authorised,
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ethical behaviour,
provisional liquidation,
corporations law,
rodney adler,
nsw supreme court,
financial position,
australian prudential,
supreme court,
hih collapse,
nsw supreme,
policyholders claims met,
australian prudential regulation,
claims met event,
met event insolvency,
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Acceptance Essays
