Licensed insurer business plan guidelines (draft)

GOVERNMENT NOTICES

Miscellaneous Instruments

WORKERS COMPENSATION ACT 1987

State Insurance Regulatory Authority - the Workers Compensation Insurer Business Plan Guidelines

I, Anthony Lean, Chief Executive, State Insurance Regulatory Authority, issue the following Guidelines pursuant to section 202B of the Workers Compensation Act 1987.

Dated this … day of ….. 2016

XXX XXXX

Chief Executive

State Insurance Regulatory Authority

1. Commencement

1.1 These Guidelines commence on the date of gazette.

2. Guideline making powers

2.1 These Guidelines are made under section 202B (4) of the Workers Compensation Act 1987 (the 1987 Act) 2.1 Explanatory Note: Section 202B (4) of the Workers Compensation Act 1987 (the 1987 Act) requires Licensed Insurers to prepare business plans in accordance with Guidelines determined by State Insurance Regulatory Authority (the Authority). The Guidelines specify the minimum requirements for Licensed Insurers to provide business plans to the Authority and how the Authority will assess the business plans.

The purpose of Section 3 of the Workplace Injury Management and Workers Compensation Act 1998, is to establish a workplace injury management and workers compensation system with the following objectives:

(a) to assist in securing the health, safety and welfare of workers and in particular preventing work-related injury,

(b) to provide:

  • prompt treatment of injuries, and
  • effective and proactive management of injuries, and
  • necessary medical and vocational rehabilitation following injuries, in order to assist injured workers and to promote their return to work as soon as possible,

(c) to provide injured workers and their dependants with income support during incapacity, payment for permanent impairment or death, and payment for reasonable treatment and other related expenses,

(d) to be fair, affordable, and financially viable,

(e) to ensure contributions by employers are commensurate with the risks faced, taking into account strategies and performance in injury prevention, injury management, and return to work,

(f) to deliver the above objectives efficiently and effectively.

These Guidelines are aimed at facilitating the achievement of these objectives by ensuring that Licensed Insurers are operating in accordance with the objectives of the system.

3. Definitions In these Guidelines -

1987 Act means Workers Compensation Act 1987

1998 Act means the Workplace Injury Management and Workers Compensation Act 1998

Authority means the State Insurance Regulatory Authority constituted under the State Insurance and Care Governance Act 2015.

Licensed insurer means an insurer who is the holder of a licence granted under Division 3 of Part 7 of the 1987 Act and in force.

Nominal Insurer means the Workers Compensation Nominal Insurer established by section 154A of the 1987 Act

Specialised insurer means a licensed insurer whose licence is endorsed with a specialised insurer endorsement.

APRA means the Australian Prudential Regulation Authority

Statement of Business Intent as defined by NSW Government Treasury is;

The Statement of Business Intent (SBI) is equivalent to the Statement of Corporate Intent (SCI), but is for non-corporatised businesses rather than State Owned Corporations. For these businesses, the agreement of the business is between the Treasurer/Portfolio Minister and Chair and Chief Executive Officer.

Non-corporatised government businesses are required to produce an SBI under the Treasury’s Reporting and Monitoring Policy.

Noting that the Statement of Corporate Intent (SCI) is defined as;

The Statement of Corporate Intent (SCI) is an annual agreement between the shareholders and board of State Owned Corporations. The purpose is to enhance accountability for performance and provide the business with certainty as to the shareholders’ expectations of financial performance.

The Statement contains, amongst other key matters, future financial performance targets and capital programs.

The Workers Compensation Insurer Business Plan Guidelines

4. Scope of Guidelines

4.1 Section 202B (4) of the Workers Compensation Act 1987 (the 1987 Act) allows the State Insurance Regulatory Authority (the Authority) to issue guidelines with respect to Licenced Insurers’ preparation and submission of business plans to the Authority (the Workers Compensation Insurer Business Plan Guidelines).

These Guidelines are designed to facilitate the achievement of the NSW workers compensation system objectives as set out in Section 3 of the 1998 Act.

The system objectives are criteria against which the effectiveness of the NSW workers compensation system is to be measured, hence the importance of insurers acting in support of these objectives.

The Authority will assess Licensed Insurers’ business plan strategic objectives against the system objectives set out in Section 3 of the 1998 Act.

As per the 1987 Act, the Business Plan Guidelines specify:

  • minimum requirements for Licensed Insurers’ business plans,
  • how Licensed Insurers are to present business plans to the Authority, and
  • how the Authority will assess those business plans.

4.2 These Guidelines apply to all Licensed Insurers, including the Nominal Insurer and specialised insurers.

The following entities are exempt from the requirements of these guidelines:

  • Self-insurers
  • NSW Self-Insurance Corporation
  • Coal Mines Insurance

4.3 These Guidelines apply to business plans commencing on or from 4pm 30 June 2016 until the Guidelines are revised or revoked.

5. Business Plan Requirements

5.1 The business plan for each Licensed Insurer is to be prepared in accordance with section 202B of the 1987 Act.

5.2 Licensed Insurers’ business plans must be approved by their board prior to submission to SIRA and include the insurer’s strategic objectives for its New South Wales workers compensation business together with targets, timeframes and planned activities to achieve the strategic objectives. The insurer’s strategic objectives should align with the system objectives outlined within section 3 of the 1998 Act and include, as a minimum, objectives for the following:

5.2.1 Premiums set in compliance with the State Insurance Regulatory Authority Market Practice and Premiums Guidelines

5.2.2 Prevention of work-related injuries '

5.2.3 Innovative injury management and return to work initiatives

5.2.4 Excellent customer service and communications

5.2.5 Building and improving internal resource capability

5.2.6 Strong governance and corporate management of the workers compensation portfolio

5.2.7 any other matters needed or sought by the Authority to respond to the system objectives and not otherwise covered in the insurer’s premium filing.

5.3 Some requirements of the business plan documentation may be met by providing:

5.3.1 The Insurer’s Injury Management Program as per Section 43 of the 1998 Act.

5.4 For the Nominal Insurer – some requirements of business plan documentation may be met by providing;

5.4.1 Statement of Business Intent and Business Plan as submitted to Treasury

5.5 For Specialised Insurers – some requirements of business plan document may be met by providing

5.5.1 Documentation regarding meeting licensing conditions

5.5.2 Documentation submitted to APRA to meet APRA requirements including the submitted business plan

6. Business Plan Filing Process

6.1 Frequency of submission of business plans

6.1.1 Licensed Insurers are to provide their business plans for the financial year beginning 30 June by 31 March of the current financial year.

6.1.2 As business planning is an ongoing business activity a revised business plan is to be submitted as per Section 202b (2) (a) if the insurer departs significantly from the objectives within its submitted business plan.

6.1.3 Requirements for 2016 / 2017 financial year

6.1.3.1 For the Nominal Insurer, the business plan for the 2016/2017 financial year is to be submitted to the Authority by 1 September 2016

6.1.3.2 For Specialised Insurers, the business plans for the 2016/2017 financial year are to be submitted to the Authority by 1 September 2016.

6.2 Assessment and Management of Business Plans

6.2.1 The criteria against which the Authority will assess the business plans of Licensed Insurers are the objectives of the Authority as set out in Section 3 of the 1998 Act. The Authority will assess whether the Licensed Insurer’s business plan is aligned to the system objectives in order to achieve an effective workers compensation system.

6.2.2 The Authority may request additional information or amendments to the business plans in order to ensure that the objectives of the 1998 Act are met.

6.2.3 Business plans may be used by the Authority to assist in the assessment of other regulatory requirements including:

6.2.3.1 Market Practices

6.2.3.2 Premium Filings

6.2.3.3 Prudential Requirements

6.2.4b Business plans will treated as per Section 243AA of the 1998 Act.

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