❓ Question regarding steps to prevent a repeat of the HIH Insurance disaster, with the Treasurer's answer heavily criticizing the Commonwealth's handling of insurance industry regulation through APRA, citing incompetence and potential political influence.
AnsweredQoN 354Legislative Assembly
QuestionView source ↗
I refer to the regulation of the insurance industry. What steps are being taken to avoid a repeat of the HIH Insurance disaster? Mr E.S. RIPPER
AnswerView source ↗
Members of this House know that the Commonwealth has constitutional responsibility for regulating the insurance industry. The Commonwealth established the Australian Prudential Regulation Authority in July 1998 to regulate financial markets, including the insurance industry. That body was so ineffective that it did not see the HIH Insurance collapse coming - a collapse that wiped out about 30 per cent of the Australian insurance industry. One of the deficiencies of APRA related to its lack of power to collect data from the insurance industry. The Commonwealth introduction the Financial Sector (Collection of Data) Bill in 2001 to enhance data collection by APRA and to ensure better prudential regulation of the insurance market. I suppose it could be said that it was better late than never. However, the full scale of the Commonwealth’s incompetence in this area was revealed in the Federal Parliament last week: the federal Parliamentary Secretary to the Minister for Finance and Administration, appropriately named Mr Slipper, quietly slipped an obscurely named Bill into the House; namely, the Treasury Legislation Amendment Bill (No. 1), the purpose of which is to clarify the operation of the Financial Sector (Collection of Data) Bill of 2001 in relation to the collection of data about the insurance industry. This measure revealed that the relevant parts of the data collection regime have still not come into operation. Therefore, APRA still does not have the power it needs to collect data from the insurance industry and to regulate this matter. The Commonwealth bungled the proclamation of the data collection laws on 1 July 2002, and the proclamation is regarded as constitutionally invalid. Therefore, another amendment Bill is needed to redress that situation. The incompetence in this area appears to be boundless, and it is already set to cost taxpayers $640 million over the next decade. That is the price tag the federal Government’s so-called light-handed regulation has given to taxpayers in this country, and the cost of the Commonwealth’s failure, through APRA, to properly oversee HIH. Of course, it is worth remembering that HIH was a major donor to the Liberal Party in this country. I wonder whether that had anything at all to do with the decision to have a light-touch regulatory approach. It is a double disgrace that 18 months after the collapse of HIH, the Australian Prudential Regulation Authority still does not have the powers it needs to protect the Australian community and the public interest. Our community in Western Australia is still vulnerable to the inadequate regulation of the insurance industry - too late by the Commonwealth - and even that was bungled.
Mr E.S. RIPPER replied: Members of this House know that the Commonwealth has constitutional responsibility for regulating the insurance industry. The Commonwealth established the Australian Prudential Regulation Authority in July 1998 to regulate financial markets, including the insurance industry. That body was so ineffective that it did not see the HIH Insurance collapse coming - a collapse that wiped out about 30 per cent of the Australian insurance industry. One of the deficiencies of APRA related to its lack of power to collect data from the insurance industry. The Commonwealth introduction the Financial Sector (Collection of Data) Bill in 2001 to enhance data collection by APRA and to ensure better prudential regulation of the insurance market. I suppose it could be said that it was better late than never. However, the full scale of the Commonwealth’s incompetence in this area was revealed in the Federal Parliament last week: the federal Parliamentary Secretary to the Minister for Finance and Administration, appropriately named Mr Slipper, quietly slipped an obscurely named Bill into the House; namely, the Treasury Legislation Amendment Bill (No. 1), the purpose of which is to clarify the operation of the Financial Sector (Collection of Data) Bill of 2001 in relation to the collection of data about the insurance industry. This measure revealed that the relevant parts of the data collection regime have still not come into operation. Therefore, APRA still does not have the power it needs to collect data from the insurance industry and to regulate this matter. The Commonwealth bungled the proclamation of the data collection laws on 1 July 2002, and the proclamation is regarded as constitutionally invalid. Therefore, another amendment Bill is needed to redress that situation. The incompetence in this area appears to be boundless, and it is already set to cost taxpayers $640 million over the next decade. That is the price tag the federal Government’s so-called light-handed regulation has given to taxpayers in this country, and the cost of the Commonwealth’s failure, through APRA, to properly oversee HIH. Of course, it is worth remembering that HIH was a major donor to the Liberal Party in this country. I wonder whether that had anything at all to do with the decision to have a light-touch regulatory approach. It is a double disgrace that 18 months after the collapse of HIH, the Australian Prudential Regulation Authority still does not have the powers it needs to protect the Australian community and the public interest. Our community in Western Australia is still vulnerable to the inadequate regulation of the insurance industry - too late by the Commonwealth - and even that was bungled.
Members of this House know that the Commonwealth has constitutional responsibility for regulating the insurance industry. The Commonwealth established the Australian Prudential Regulation Authority in July 1998 to regulate financial markets, including the insurance industry. That body was so ineffective that it did not see the HIH Insurance collapse coming - a collapse that wiped out about 30 per cent of the Australian insurance industry. One of the deficiencies of APRA related to its lack of power to collect data from the insurance industry. The Commonwealth introduction the Financial Sector (Collection of Data) Bill in 2001 to enhance data collection by APRA and to ensure better prudential regulation of the insurance market. I suppose it could be said that it was better late than never. However, the full scale of the Commonwealth’s incompetence in this area was revealed in the Federal Parliament last week: the federal Parliamentary Secretary to the Minister for Finance and Administration, appropriately named Mr Slipper, quietly slipped an obscurely named Bill into the House; namely, the Treasury Legislation Amendment Bill (No. 1), the purpose of which is to clarify the operation of the Financial Sector (Collection of Data) Bill of 2001 in relation to the collection of data about the insurance industry. This measure revealed that the relevant parts of the data collection regime have still not come into operation. Therefore, APRA still does not have the power it needs to collect data from the insurance industry and to regulate this matter. The Commonwealth bungled the proclamation of the data collection laws on 1 July 2002, and the proclamation is regarded as constitutionally invalid. Therefore, another amendment Bill is needed to redress that situation. The incompetence in this area appears to be boundless, and it is already set to cost taxpayers $640 million over the next decade. That is the price tag the federal Government’s so-called light-handed regulation has given to taxpayers in this country, and the cost of the Commonwealth’s failure, through APRA, to properly oversee HIH. Of course, it is worth remembering that HIH was a major donor to the Liberal Party in this country. I wonder whether that had anything at all to do with the decision to have a light-touch regulatory approach. It is a double disgrace that 18 months after the collapse of HIH, the Australian Prudential Regulation Authority still does not have the powers it needs to protect the Australian community and the public interest. Our community in Western Australia is still vulnerable to the inadequate regulation of the insurance industry - too late by the Commonwealth - and even that was bungled.
Mr E.S. RIPPER replied: Members of this House know that the Commonwealth has constitutional responsibility for regulating the insurance industry. The Commonwealth established the Australian Prudential Regulation Authority in July 1998 to regulate financial markets, including the insurance industry. That body was so ineffective that it did not see the HIH Insurance collapse coming - a collapse that wiped out about 30 per cent of the Australian insurance industry. One of the deficiencies of APRA related to its lack of power to collect data from the insurance industry. The Commonwealth introduction the Financial Sector (Collection of Data) Bill in 2001 to enhance data collection by APRA and to ensure better prudential regulation of the insurance market. I suppose it could be said that it was better late than never. However, the full scale of the Commonwealth’s incompetence in this area was revealed in the Federal Parliament last week: the federal Parliamentary Secretary to the Minister for Finance and Administration, appropriately named Mr Slipper, quietly slipped an obscurely named Bill into the House; namely, the Treasury Legislation Amendment Bill (No. 1), the purpose of which is to clarify the operation of the Financial Sector (Collection of Data) Bill of 2001 in relation to the collection of data about the insurance industry. This measure revealed that the relevant parts of the data collection regime have still not come into operation. Therefore, APRA still does not have the power it needs to collect data from the insurance industry and to regulate this matter. The Commonwealth bungled the proclamation of the data collection laws on 1 July 2002, and the proclamation is regarded as constitutionally invalid. Therefore, another amendment Bill is needed to redress that situation. The incompetence in this area appears to be boundless, and it is already set to cost taxpayers $640 million over the next decade. That is the price tag the federal Government’s so-called light-handed regulation has given to taxpayers in this country, and the cost of the Commonwealth’s failure, through APRA, to properly oversee HIH. Of course, it is worth remembering that HIH was a major donor to the Liberal Party in this country. I wonder whether that had anything at all to do with the decision to have a light-touch regulatory approach. It is a double disgrace that 18 months after the collapse of HIH, the Australian Prudential Regulation Authority still does not have the powers it needs to protect the Australian community and the public interest. Our community in Western Australia is still vulnerable to the inadequate regulation of the insurance industry - too late by the Commonwealth - and even that was bungled.
Members of this House know that the Commonwealth has constitutional responsibility for regulating the insurance industry. The Commonwealth established the Australian Prudential Regulation Authority in July 1998 to regulate financial markets, including the insurance industry. That body was so ineffective that it did not see the HIH Insurance collapse coming - a collapse that wiped out about 30 per cent of the Australian insurance industry. One of the deficiencies of APRA related to its lack of power to collect data from the insurance industry. The Commonwealth introduction the Financial Sector (Collection of Data) Bill in 2001 to enhance data collection by APRA and to ensure better prudential regulation of the insurance market. I suppose it could be said that it was better late than never. However, the full scale of the Commonwealth’s incompetence in this area was revealed in the Federal Parliament last week: the federal Parliamentary Secretary to the Minister for Finance and Administration, appropriately named Mr Slipper, quietly slipped an obscurely named Bill into the House; namely, the Treasury Legislation Amendment Bill (No. 1), the purpose of which is to clarify the operation of the Financial Sector (Collection of Data) Bill of 2001 in relation to the collection of data about the insurance industry. This measure revealed that the relevant parts of the data collection regime have still not come into operation. Therefore, APRA still does not have the power it needs to collect data from the insurance industry and to regulate this matter. The Commonwealth bungled the proclamation of the data collection laws on 1 July 2002, and the proclamation is regarded as constitutionally invalid. Therefore, another amendment Bill is needed to redress that situation. The incompetence in this area appears to be boundless, and it is already set to cost taxpayers $640 million over the next decade. That is the price tag the federal Government’s so-called light-handed regulation has given to taxpayers in this country, and the cost of the Commonwealth’s failure, through APRA, to properly oversee HIH. Of course, it is worth remembering that HIH was a major donor to the Liberal Party in this country. I wonder whether that had anything at all to do with the decision to have a light-touch regulatory approach. It is a double disgrace that 18 months after the collapse of HIH, the Australian Prudential Regulation Authority still does not have the powers it needs to protect the Australian community and the public interest. Our community in Western Australia is still vulnerable to the inadequate regulation of the insurance industry - too late by the Commonwealth - and even that was bungled.
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