Three Hong Kong based subsidiaries of HIH Australia have been placed under independent administration by the local government, following a preliminary accounting which revealed that their assets included a large portion of accounts receivable from the parent company, which was placed under the direction of a provisional liquidator last March 15th.
HIH Insurance (Asia) Ltd., HIH Casualty and General Insurance (Asia) Ltd. and FAI First Pacific Insurance Co. Ltd. will be administered by two independent managers from PriceWaterhouseCoopers.
According to a report from Reuters News Agency, government insurance regulators had determined that the portion of receivables, including amounts owed on reinsurance claims, was significant enough, that the three companies would be “technically insolvent” if the amounts were unpaid or heavily discounted. The move would “best secure the assets of the three insurers to meet their liabilities and safeguard the interest of policy holders,” indicated a government spokesman.
Asia Area Reinsurance Co Ltd, a fourth HIH Hong Kong subsidiary, remained unaffected by the regulators decision, as it was deemed to have sufficient funds to continue operations.
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