Review of implementation of the proposed self-insurance licensing framework

Submission cover sheet

  • Name of organisation or individual making this submission

    Confidentiality requested

Questions on possible options

  1. What is your view of the proposed standard licence conditions?

    Recommendation 8 - removal of OHSMS self-audit and OHSMS audit requirements - This recommendation dismiss the proven role of OHSMS requirements in managing risks in the workplace and how these requirements truly reflect proactive and preventative measures in securing a safe workplace. 1) OHSMS requirements is internationally accepted evidenced by the development of the international standard on OHSMS (ISO 45001). 2) Majority of the regulatory jurisdictions in Australia incorporate OHSMS requirements as part of determining the "fit & proper" assessment of their self-insurers as stipulated in their relevant legislation which is similar to NSWs "suitability of applicant." The OHSMS requirements are distinctly separate from considering the self-insurers WHS performance using incident/injury/claims rate. 3) The National self-insurer OHSMS audit tool (NAT) was developed in 2006-2007 and was used since to audit self-insurers across Australia and was accredited for use by JAS/ANZ. The NAT was developed in response to the Productivity Commission Report recommendations with the objective of reducing the cost of compliance burden for multi-state self-insurers. The Heads of Workers Compensation Authorities is the document owner of the NAT. The next phase for the use of the NAT is to establish common audit process and methodology with all jurisdictions in support of the national harmonization strategy.

  2. What is your view of the appropriateness of the draft top tier measures for conduct and claims management to set SIRA’s expectations of insurance performance?

    Recommendation 8 - removal of OHSMS self-audit and OHSMS audit requirements NOT SUPPORTED due to the following factors: 1) Section 22 (1) (a) of WIMWC Act 1998 states "Objectives and general functions of Authority under workers compensation legislation - to promote the prevention of injuries and diseases at the workplace and the development of healthy and safe workplaces." 2) Section 211 (2) (a) of WCA Act 1987 states "Determination of application for licence - The Authority may, in determining the licence, take into consideration the suitability of the applicant....the efficiency of the workers compensation SYSTEM and such other matters as the Authority thinks fit." 3) The conduct of OHSMS audit is NOT a duplicity of SafeWorks enforcement role (REACTIVE strategy). The undertaking of OHSMS audit will identify hazards that yet to translate to an incident and therefore, promotes prevention of injuries, a PROACTIVE strategy, one that supports section 22 of the Act 1998. 4)The conduct of OHSMS audits was legally proclaimed as legitimate and not outside the powers of the Workers Compensation Act and there was NO breach of the Trade Practices Act (legal advice in 2001) 5) Self-insurers must be promoted as a model organization (conducting best practice) in line with the objectives of the Australian Work Health and Safety Strategy 20112-2022 & NSW WHS Roadmap 2022.

  3. Are there any other areas or measures that should be considered?

    The requirement for OHSMS self-audit was already a subject of reducing business red tape, where, the number of criteria to be submitted in the OHSMS report was greatly reduced from seven to two, specifically on OHSMS plan and senior management review of the OHSMS (SYSTEM) performance (not WHS performance which denotes incident/injury rates). The measurement of WHS performance via incident/injury rates has not been regarded by WHS professionals (nationally and internationally) as an effective positive performance indicator on the adequate & appropriate management of health & safety in the workplace as it measures "failures" in the system and therefore, a reactive one. "The traditional reliance on measures such as lost time injuries has been heavily criticized -- SafeWork Australia, Issues in the measurement and reporting of WHS performance: a review." Application of a risk-based method in the licensing requirement can be achieved by: 1) OHSMS audit requirement using the NAT for new applicants. Once accepted in the self-insurance scheme, an OHSMS audit should be undertaken a year prior to licence renewal, without pass or fail status but will be required to close-off identified non-conformances in six months. This strategy supports governance framework for SIRA surrounding licence requirements and to support the assessment of an organistions "suitability" to remain as self-insurers. 2) continue the licensing requirement for OHSMS self-audits to be conducted by self-insurers as part of SIRAs governance framework. As good business practice, employers must review and evaluate their OHSMS requirements on a yearly basis.

  4. What is your view on applying the same assessment criteria to applications for a new self-insurer licence?

    OHSMS audit requirement using the NAT for new applicants must be maintained to support Section 211 (2) (a) of WCA Act 1987.

  5. What is your view of the allocation of new self-insurers to the mid-tier for their first year under licence?

    Noting that rigorous review of the applicants suitability to become a self-insurer, this suggestion is reasonable.

  6. What is your view on the requirement for self-insurers to submit a business plan to outline their strategic direction consistent with licensed insurers?

    OHSMS self-audit report could be part of this business plan.

At our discretion we may remove parts of submissions because of length, content, appropriateness or confidentiality (privacy) reasons.

Catalogue no. SIRA 08056
State Insurance Regulatory Authority
Motor Accidents Insurance Regulation,
Level 25, 580 George Street, Sydney NSW 2000
General phone enquiries 1300 137 131 or
Claims Advisory Service 1300 656 919


© Copyright State Insurance Regulatory Authority NSW 2016