There has been concern that builders with HIH policies would have difficulties getting replacement cover quickly and at reasonable rates. Such difficulties could have delayed the start of new construction and the completion of work already under way.

The Australian Prudential Regulation Authority (APRA) has had extensive discussions on these issues with the insurance companies that write builders warranty insurance, as well as with others who had done so previously.

Graeme Thompson, CEO of APRA said: Following these discussions we can report that the two main insurers  Royal & Sun Alliance and Allianz (through Dexta)  are providing replacement cover for new building work on terms similar to those available before HIHs provisional liquidation.

In addition, both companies have streamlined their processing of applications from builders and taken on extra staff to cope with the heavy demand. One of these companies is also providing cover against claims on future work on building that has already commenced.

Claims (past and future) in relation to past building work remain as claims against HIH and their resolution depends on the workout of HIHs financial position.

APRA will continue to work with the industry and the provisional liquidator to see what further assistance can be provided to people suffering financial hardship because of HIHs provisional liquidation.

For further information contact:

Gloria Peterson
Public Affairs Manager
02 9210 3385 or 0419 250 286