Self-insurer tiering

Since the introduction of Tiering SIRA has implemented monitoring tools and systems which provide insurers with performance data which supports the Tiering framework.

In December 2020 SIRA conducted Tiering stakeholder consultation. Giving consideration to the feedback received by SIRA it is reviewing the tiering model and whether it’s current form continues to best support the risk management of the scheme and it’s performance. As such tiering is being considered as part of the Self Insurer Framework Review and whether the risks can be managed as part of the framework. The tiering outcome will be provided at the conclusion of the Self Insurer Framework Review in Q4 2021.

We adopt a risk based approach to determine the measures that inform tiering classifications for self-insurers.

We regularly monitor self-insurer performance against the tier measures for conduct, claims management and financial ability. Self-insurers receive regular feedback from us in relation to their performance against these standards.

The tiered supervisory model acknowledges exemplary and acceptable workers compensation performance. It also detects risks to the achievement of workers compensation system objectives, prompting us to make a risk-based regulatory response.

The model includes:

• top tier: a self-insurer is classified as top tier if they meet top and mid-tier measures. To meet top tier measures, the self-insurer demonstrates exemplary performance in the following areas of data quality, case management practice, focus on RTW outcomes and prevention and resolution of complaints.
• mid tier: recognised as meeting SIRA’s acceptable standards in accordance with the licence conditions.
• low tier: a self-insurer is classified as low tier where they do not meet mid-tier measures. Regulatory action is taken with low tier insurers to ensure an improvement in performance to at least mid-tier standards. The low tier is intended to be a short term placement allocation for self-insurers that they are performing below the mid-tier standard. The self-insurer must improve their performance in order to move to a higher tier or risk losing their licence.
• not assessed yet or 'under review': self-insurers who have been operating within the system for less than 12 months are not assessed. We have the discretion to review any self-insurer's tiering level for any reason or risk.

At a minimum, we formally tier each self-insurer on an annual basis. Formal tiering can also occur at any other time where we determine there is new evidence relating to performance or risk which requires regulatory action or a review of the performance rating. This may include, but is not limited to a licence renewal, a change in the performance of a self-insurer (either an improvement or deterioration in performance) or a self-insurer entering liquidation.

The self-insurer tiering status is current.