What Regulation Can Achieve and What it Cannot
Chapter 8: Finance, Compliance and the Ambiguity of Actuarial Risk
8. Finance, compliance and the ambiguity of actuarial risk The financial reforms that emanated from HIH, in both the insurance and investment regimes (as discussed in Chapter 5 pp. 123–39), affected a far broader range of businesses than either the major hazard or counter-terrorism reforms. In the case of prudential reforms to insurance, they had the potential to influence purchasing decisions concerning insurance cover for their business. The insurance reforms discussed above (pp. 124–32) had the potential to increase the cost to business of purchasing insurance from an Australian-based insurer, hence making the decision to source insurance overseas more attractive. The corporate law reforms (CLERP 9) primarily affected public companies within Australia, but changes to accounting practices, such as the move to International Financial Reporting Standards (IFRS), affected all business sectors, public and private, government and not-for-profit. The assessment of the impact of both prudential and financial regulatory reforms undertaken in this research was restricted. This research primarily analysed the impact of the prudential and financial reforms on the facilities studied in the previous chapters: namely the major hazard facilities, sea and airports. For this reason, the analysis undertaken here should be viewed with these particular sectors in mind. However, to understand the impact of these reforms it became essential to place them within the broader financial regulatory framework and industry setting. To assist in this, interviews were also undertaken with the Insurance Council of Australia (ICA), the peak body representing the Insurance industry and the Institute of...
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