The Board was very pleased to note the significant progress which has been made on Motor Accidents Insurance (Compulsory Third Party) Scheme reform. This has been a massive effort to date and the new scheme is on track to commence on 1 December 2017.
The Board noted that the Minister for Finance, Services and Property and the SIRA Acting Chief Executive have signed the new CTP Insurance Industry Deed, as have all the current Compulsory Third Party (CTP) insurers. The SIRA Acting Chief Executive subsequently also approved new scheme licences for the CTP insurers, and SIRA has communicated with insurers that their licences have been granted. The new Green Slip prices have been reviewed by SIRA and are now available on the new Green Slip Price Check website. As well as delivering significant premium reductions (of the order of 24 per cent on average for the Class 1 metro headline price, compared to when the legislation was introduced), the new scheme will mark a significant change in claims management towards a much less adversarial approach.
Board Members were also updated on the continued high level of stakeholder consultation and progress in developing supporting instruments for the Home Building Compensation Scheme reform. With reforms under the Home Building Amendment (Compensation Reform) Act 2017 due for implementation on 1 January 2018, the Board provided approval for targeted consultation with key stakeholders on selected supporting instruments, and in-principle approval for those on which stakeholders have recently provided their feedback. This specifically relates to the current version of the Business Plan Guidelines and Claims Handling Guidelines which were informed by public consultation which closed on 18 October 2017.
At this meeting the Board had the opportunity to discuss options to improve the workers compensation insurance dispute resolution system with the Department of Finance, Services and Innovation central policy office team. Board Members noted that a discussion paper is expected to be released for public consultation in the near future.
The Board continued its discussions on the new SIRA Strategic Plan which will increase SIRA’s impact on outcomes for the people and businesses of NSW through risk and evidence-based, customer-centric, regulation and stewardship. Members noted that the new Strategic Plan will be presented to the Board for endorsement at the December 2017 meeting.
The Board was provided with the monthly update on the implementation of SIRA’s strategy relating to section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. Continuing its efforts to work closely with insurers and key stakeholders to ensure effective implementation of section 39 provisions, the Board noted that SIRA has written to insurers recommending that each worker affected by the transition be offered the opportunity to receive their final weekly payment entitlements in advance. SIRA has also introduced new Community Connect funding for workers to use to fund community support services or pay to address a specific barrier or need. Workers can access Community Connect if they have received notification from the insurer confirming that weekly payments will cease on or before 30 June 2018, due to section 39 of the 1987 Act, and need to apply for Community Connect through the insurer.
Other issues considered at the October 2017 Board meeting included:
- The Legislative Council Standing Committee on Law and Justice has been designated to undertake the Statutory Review of the State Insurance and Care Governance Act 2015. Submissions were due to the Committee by 31 October 2017.
- The Board reviewed SIRA’s draft annual report for the 2016-17 Financial Year.
- Joined by a NSW Treasury Corporation representative, Board Members received an insightful presentation from Mercer, external consultants to the business, who work with SIRA in meeting its financial accountabilities for the workers compensation Insurers' Guarantee Fund.
- The quarterly update on People and Culture programs in SIRA:
- SIRA continues work to develop a strong wellbeing-focused and inclusive culture across its three sites.
- The Board noted the key people and culture statistical information provided.
- A SIRA People and Culture Strategy will include an action plan addressing the SIRA results in the 2017 People Matter Employee Survey.
Chairperson, SIRA Board
The first item on the agenda for our September meeting was a discussion about strategy with the broader leadership team of SIRA directors. This followed a special session earlier in the week where the Board reviewed the progress SIRA has made since its establishment two years ago and confirmed the purpose and mission of our organisation. At the meeting Board Members enjoyed a stimulating interchange with the SIRA directors and the group discussed our key priorities for the next eighteen months. We are determined to develop SIRA as a modern, data driven, outcomes focussed regulator that makes a genuine positive difference to the people and businesses of NSW. Board members valued meeting with the broader SIRA Leadership team to identify ‘what success looks like’ for SIRA.
The Board was pleased to note that SIRA is working closely with the Department of Finance, Services and Innovation in developing options to improve the workers compensation insurance dispute resolution system. The project is on track to achieving the milestones set out, with discussions on improvements to the current system taking place later this year. The aim is to introduce system reform in 2018.
The Board was updated on the Premium Relativities and the Risk Equalisation Mechanism (REM) for the new Compulsory Third Party (CTP) Scheme. It was highlighted that SIRA has been pressure-testing the approach to new premiums that will apply from 1 December to coincide with the commencement of the new Scheme. The outcomes of this analysis identified that minor changes are required to premium relativities and REM amounts for the new scheme, based on mitigating the risk of an increase in premiums for motorcycle owners, and making adjustments to allow for new distance-based charges for rideshare and taxi operators. The adjusted premium relativities figures for motorcycles and point to point vehicles were approved by the Board.
The Board was provided with the monthly update on the implementation of SIRA’s strategy relating to section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. Members noted that SIRA continues to work closely with Insurers and key stakeholders to ensure implementation of section 39 is as smooth as possible.
The Board was impressed with a demonstration of a new Salesforce-based online system to receive and administer disputes (‘DRS Live’). This system will introduce new modern functionality and replace several complicated and extensive spreadsheets. It is vital to help us deliver timely, independent, fair and cost-effective resolution of disputes.
Chairperson, SIRA Board
At the August meeting, the Board received a presentation from the President of the Workers Compensation Commission, His Honour Judge Greg Keating, who provided an update on the Commission’s role, organisational initiatives, and approaches to early resolution of disputes in the system.
Improving customer satisfaction with key government services is a state priority and the SIRA Board was pleased to receive information about the increasing SIRA focus on improving outcomes for claimants and purchasers in the schemes and systems SIRA regulates. The Board was encouraged to hear about plans for cross-SIRA collaboration as the learnings from the 2016 CTP consultation process are equally applicable to parties in the workers compensation system.
The Board was pleased to note that SIRA and the NSW Data Analytics Centre (DAC) have been working in collaboration with data organisations to identify the capabilities and products that could provide significant benefits for the CTP Scheme (old and new), and for the regulatory capabilities of SIRA. Various initiatives are planned to leverage ‘Big Data’, and meet the key objectives of the new CTP Scheme through innovative digital solutions that will improve claimant experience and increase the proportion of benefits to customers.
The Board was updated on the development of Motor Accident Guidelines that set out the detail and operational considerations for the new Compulsory Third Party (CTP) Scheme. Provided for under the Motor Accident Injuries Act 2017, the Guidelines are in a secondary stage of consultation with a broad-based stakeholder group and interested parties. The Board also considered a risk report which detailed the major risks to the introduction of the new CTP program on 1 December and the mitigations in place to deal with those risks.
The Board was provided a monthly update on the implementation of SIRA’s strategy relating to Section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. Members noted ongoing progress in planning for the transition processes for affected claimants, and the level of community use of the SIRA Section 39 support and information service, contactable via email and phone, 13 10 50.
In line with SIRA’s financial accountabilities for the Workers Compensation Operational Fund (the Fund), the SIRA Board approved the Workers Compensation Fund contribution per cent for the 2017/18 Financial Year for Self- and Specialised Insurers. Established under section 34 of the Workplace Injury Management and Workers Compensation Act 1998 (the Act), the Fund is legislated to receive revenue from insurers, thereby providing for the operational budgets of SIRA, SafeWork NSW, the Workers Compensation Independent Review Office (WIRO) and the Workers Compensation Commission. Also of significance, the Fund provides funding for vocational programs for claimants under Section 53 of the Act administered by SIRA, and Legal Aid, through the Independent Legal Assistance and Review Service (ILARS), administered by the WIRO.
The Board provided in-principle approval for draft Business Plan Guidelines and Claims Handling Guidelines for the Home Building Compensation Scheme, with a view to these being consulted on in September 2017 as part of Phase 2 consultation on supporting instruments for the Home Building Amendment (Compensation Reform) Act 2017. The Board was also pleased that public consultation on the builder eligibility and premium discussion papers commenced earlier this month, comprising a call for written submissions and a workshop with key stakeholders.
Other issues considered at the August 2017 Board meeting included:
- Trends over the 2016/17 Financial Year in dispute resolution services that SIRA delivers within the Compulsory Third Party (CTP), workers compensation and Lifetime Care and Support schemes.
- An update on People and Culture programs in SIRA:
- SIRA continues to develop a strong wellbeing and inclusion-focused culture across its three sites, working in connection with the Department of Finance, Services and Innovation (DFSI) Great Place to Work strategy, the Diversity Council and the staff Ambassador Network.
- The 2017 NSW People Matter Employee Survey (closed on 30 June) results are being analysed, with SIRA results expected to be available towards the end of August.
Chairperson, SIRA Board
At the July meeting the Board approved the principles for a system to adjust for excess profits or losses that arise in the transition to the New Compulsory Third Party (N-CTP) Scheme, scheduled to be introduced on 1 December this year. The Board noted the substantial consultation process that has been undertaken with a range of stakeholders including insurers in achieving this outcome, which is appropriate given the new system breaks significant new ground.
The Board’s feedback was sought and an update provided on the development of Guidelines that set out the detail and operational considerations for the N-CTP Scheme. These Guidelines are currently under consultation with key stakeholders.
The Board was pleased to note successful progress in implementing the N-CTP Scheme, including attendance at a number of key meetings by the SIRA Board Chair and Deputy Chair with stakeholders and the Minister for Finance, Services and Property.
As signalled in the previous Board Communiqué, the NSW Parliament passed the Home Building Amendment (Compensation Reform) Bill 2017 on 20 June 2017, and it received assent on
27 June. The Board was pleased to note that a small number of provisions of the Bill commenced on 30 June 2017, and that SIRA aims to start stakeholder consultation on high-priority supporting instruments in August 2017, namely builder eligibility and premium-setting.
SIRA is conducting a review of the workers compensation specialised insurance licensing framework to improve customer outcomes, and ensure the framework is fit for purpose to complement SIRA’s recently introduced Licensed Insurer regulatory framework. The Board was updated on the review, with Members asked to provide feedback on policy options for further development ahead of proposed consultation with stakeholders in September 2017.
In line with SIRA’s financial accountabilities for the Workers Compensation Operational Fund (the Fund), the SIRA Board approved the publication of the deemed premium income methodology for self-insurers. Established under section 34 of the Workplace Injury Management and Workers Compensation Act 1998 (the Act), the Fund is legislated to receive revenue from insurers, thereby providing for the operational budgets of SIRA, SafeWork NSW, the Workers Compensation Independent Review Office (WIRO) and the Workers Compensation Commission. Also of significance, the Fund provides funding for vocational programs for claimants under Section 53 of the Act administered by SIRA, and Legal Aid, through the Independent Legal Assistance and Review Service (ILARS), administered by the WIRO.
The Board was provided a monthly update on the implementation of SIRA’s strategy relating to Section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. Members were pleased to note significant progress has occurred in cross-agency planning of the transition processes for affected claimants.
In early 2017, the NSW Law and Justice Committee reported on the complex nature of dispute resolution processes in workers compensation matters. The Board was provided an update on work underway by the Department of Finance, Services and Innovation to support Government’s response to the recommendations of the Parliamentary Review, which is due by September 2017.
The Board also considered and provided feedback on a draft whole-of-SIRA Compliance and Enforcement Policy, and noted the efforts of the leadership in the Compliance and Enforcement branch to provide new vision to support a more effective, risk-based approach to regulation.
Other issues considered at the July 2017 Board meeting included:
- A demonstration of an upgrade to the Compulsory Third Party insurance Green Slip Calculator which is designed to improve the customer ‘shopping around’ experience.
- A demonstration of a new on-line claims notification tool for Compulsory Third Party claims.
- An update on People and Culture programs in SIRA:
- NAIDOC (National Aboriginal and Islanders Day Observance Committee) Week celebrations, which were attended by SIRA staff across the three locations to celebrate Aboriginal and Torres Strait Islander culture.
- The 2017 NSW People Matter Employee Survey, which closed on 30 June, with the Department of Finance, Services and Innovation cluster continuing to lead the way with staff participation levels rising to 93 per cent. Since 2014, Better Regulation Division and SIRA have increased their response rates by 27 per cent. Evaluation is underway and reporting against results is expected in the near future.
- A number of staff engagement projects continue to be progressed in response to the 2016 NSW People Matter Employee Survey.
- Recent structural changes within DFSI, with the establishment of a stand-alone Chief Executive of SIRA at the Deputy Secretary level.
Chairperson, SIRA Board
The Board was pleased to note the substantial progress on preparation and consultation ahead of the commencement of the new Compulsory Third Party (CTP) Scheme by 1 December 2017. The update provided to the Board included advice on the data and digital strategy initiatives for reform of the CTP Scheme, both from the perspective of improving the customer experience in interacting with the Scheme, and continuous improvement of SIRA’s capability to monitor, supervise and drive scheme performance.
Board Members were also briefed on work and consultation underway on developing premium elements under the new Scheme. A milestone in CTP reforms will be reached over forthcoming weeks with the scheduled ‘go-live’ of the premium component of the Scheme.
The Chief Executive Officer of icare, along with senior executive advisors, presented to the SIRA Board on the December 2016 valuation of the liabilities of the workers compensation Nominal Insurer scheme managed by icare.
The Board again received an update on implementation of SIRA’s strategy relating to Section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. Insurer information sessions on the section 39 transition have been continuing, with additional sessions held in the week of 19 June to fulfil the demand for the sessions. Insurers have been provided with up-to-date information on current activities and new initiatives, including the section 39 information and support services, and section 53 community connect program, giving insurers the opportunity to hear directly from guest presenters from the Workers Compensation Commission, HSNet and Ability Links.
Board Members were also advised that SIRA had recently published updated information about section 39 on its website to assist workers and stakeholders to understand the impact of the legislation and the way it applies to them. Stakeholders have been informed of the update via a SIRA bulletin on 1 June 2017, together with communication which directs insurers to the information on the website when communicating about section 39. The Workers Compensation Commission will also refer to this information in their next ‘E Bulletin’.
SIRA is consulting with self-insurers in the final phase ahead of the anticipated publishing of the Workers Compensation Self-insurance licensing framework by 1 July. The Board was advised that SIRA will consult with the NSW Self-Insurer Association during the implementation transitional period to 31 December 2017 as self-insurers are building capability to meet the new licence conditions.
Other issues considered at the June 2017 Board meeting included:
- Quarterly statistics released by SIRA Dispute Resolution Services. Board Members were provided with an update on operational performance of the Services, and briefed on significant trends and strategic issues for consideration.
- Members were provided with a progress update on Government reform of the Home Building Compensation Scheme and were pleased to be informed at the end of the meeting that the Act reforming the scheme had been passed by the NSW Upper House that day.
- Further to discussion at the May meeting of the Board, Members were advised that work is underway to plan for the launch by August 2017 of the updated Small Business Strategy for work, health and safety and workers compensation.
An update on People and Culture programs in SIRA:
- The annual Better Regulation Division and SIRA Staff Awards were presented at a Ceremony at NSW Parliament House in Sydney on 7 June 2017. Staff were delighted to hear from the Hon. Minister Kean MP, Minister for Innovation and Better Regulation, and I had the privilege also of speaking at the ceremony on behalf of the Board. Staff from the Dispute Resolution Services division were finalists in the ‘Commitment to Wellness and Safety Award’. I was mightily impressed by the energy and enthusiasm of the people in the room. This augurs well for the future.
- The 2017 NSW People Matter Employee Survey went live on 2 June 2017, with staff encouraged to ‘have their say’ by 30 June 2017.
Chairperson, SIRA Board
The Board was pleased to note an updated Small Business Strategy for work, health and safety and workers compensation has been drafted in collaboration with the Small Business Reference Group (SBRG) established through a SIRA commitment as part of the existing Small Business Strategy 2013 (Workcover: Making it Easier), with the Office of the Small Business Commissioner and SafeWork NSW.
This strategy was designed to help small businesses with limited time and resources better manage work health and safety, workers compensation and return to work, and is consistent with whole-of-Government directions in making it easier to do business and in supporting small business in particular. It will guide the work of SIRA, SafeWork NSW and the SBRG over the next three years.
At its May Meeting, the SIRA Board further considered the Motor Accidents Injuries Bill 2017 provision for Excess Profit and Loss Adjustment (profit normalisation) in the Motor Accident Injuries Compulsory Third Party (CTP) Scheme. Noting earlier consultation with insurers and the consideration of principles for a profit normalisation mechanism, the Board has now approved the use of a specific premium profit margin for the purposes of consultation with stakeholders on the design of the transitional provisions.
Quarterly statistics are released to the insurance industry on the performance of the CTP Scheme as required by the Motor Accidents Compensation Act 1999. The Board was therefore provided a quarterly update on the CTP Scheme to brief Members on any trends or changes in CTP premium prices, numbers of claims and insurer market share.
The Board received an update on the implementation of SIRA’s strategy relating to Section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. At this Meeting, the Board was provided proposed options for refining the implementation of the strategy, and considered updates to insurer guidance documentation and facts sheets which are due to be made available in May/June 2017.
Other issues considered at the May 2017 Board meeting included:
- SIRA’s approach to setting levies to fund the Dust Diseases Scheme considering analysis of actual Dust Disease claim rates and costs by industry.
- A progress update on Government reform of the Home Building Compensation Scheme.
- An update on People and Culture programs in SIRA:
- In early May, Uncle Allen Madden performed a moving Welcome to Country ceremony at SIRA’s new home in the McKell Building, Sydney. Uncle Allen is a Gadigal Elder, a Board Member of the Metropolitan Local Aboriginal Land Council and a highly respected member of the Redfern Aboriginal Community. I had the privilege also of speaking at the ceremony.
- The SIRA Executive Leadership Team is progressing the establishment of a SIRA people and culture executive committee and a people and culture strategy.
- The SIRA Acting Chief Executive has signed a pledge as a commitment to one of the recent successful staff innovation projects, ‘Move more sit less’.
- BRD/SIRA staff forums have been held in the Sydney CBD and Gosford locations, with a range of cross-team presentations.
- The Dispute Resolution Services Great Place to Work team is continuing their program to improve the wellness and safety of others in the workplace by giving back to the community and raising almost $600 for Assistance Dogs Australia at their Easter celebrations, and commencing weekly fitness groups and a six-month Vitality program aimed at assisting staff to become their healthiest version.
Chairperson, SIRA Board
In March 2017 the Motor Accidents Injuries Bill 2017 (the Bill) was passed through both houses of the NSW Parliament. The Bill aims to achieve an increased proportion of benefits to seriously injured road users and reductions in the time it takes to resolve claims, instances of claims fraud and exaggeration, and the cost of (Compulsory Third Party) Green Slip premiums. At the April meeting, the Board reviewed the detailed planning aiming to introduce the new scheme in December 2017.
The SIRA Board also considered the Bill’s provision for Excess Profit and Loss Adjustment (profit normalisation) in the Motor Accident Injuries Compulsory Third Party (CTP) scheme. Further to the Board’s release in January 2017 of a report entitled Reforming Insurer Profit in Compulsory Third Party Motor Vehicle Insurance, SIRA has canvassed several options with insurers for a profit normalisation mechanism (PNM). The principles for the PNM were discussed.
Since becoming the NSW workers compensation regulator in September 2015, SIRA has identified opportunities and developed strategies to improve the supervision and regulation of insurers within the workers compensation system. At its meeting on 24 April, the SIRA Board focused its strategic discussion on the workers compensation Insurer Supervision Model and discussed opportunities to improve insurer and system performance rather than only respond to non-compliance.
The Board again received an update on SIRA’s ongoing strategy relating to Section 39 of the Workers Compensation Act 1987 – facilitating benefit pathways, support programs and return to work assistance for those claimants transitioning off weekly benefits in certain circumstances after five years. The monthly consideration of the impact and implementation of the strategy enables the Board to provide advice on options for refining the implementation to better meet the objectives of the workers compensation system.
Other issues considered at the April 2017 Board meeting included:
- an update on government inquiries into the issue of autonomous vehicles, noting that the introduction of autonomous vehicles raises significant considerations for SIRA as the regulator of the NSW CTP scheme. States and territories around Australia have agreed to undertake a review of their CTP schemes within the next two years to identify any eligibility barriers to accessing these schemes by occupants of an autonomous vehicle, and subject to this review, substantial work will be needed to ensure any resulting reforms are nationally consistent. SIRA will continue to work with Transport for NSW and the National Transport Commission on this issue and provide updates to future Board meetings.
- an update on an independent review of the existing Motor Accidents Insurance Regulation and Lifetime Care & Support levies. SIRA will in due course advise on the outcomes of the review.
- a progress update on government reform of the Home Building Compensation Scheme.
- an update on people and culture programs in SIRA designed to continue to build a high-performance, inclusive, customer-centred culture that supports employee wellbeing and offers rewarding careers making a difference for NSW:
- Since the last Board meeting, the SIRA Executive Leadership Team has decided to establish a SIRA people and culture committee to lead an integrated program to build capability and culture.
- The Acting Chief Executive of SIRA is a member of the Department of Finance, Services and Innovation's (DFSI) Diversity Council, which is establishing seven DFSI Employee Resource Groups; and has recently become the executive sponsor for the employee resource group for people with disability.
- SIRA’s existing Social, Networking, Opportunities, Wellbeing (SNOW) activities and groups have been aligned with the DFSI Great Place to Work (GPTW) strategy and Ambassador Network. Groups across the three SIRA sites have developed an integrated events calendar along with local activities.
Chairperson, SIRA Board
At its 27 March meeting, the Board continued an agreed series of strategic discussions, on this occasion focusing on claimant experience and outcomes within Workers Compensation Insurance. The Board noted SIRA’s progress in developing a strategy to improve outcomes for workers compensation claimants, including return to work and health and wellbeing outcomes.
Further to intensive SIRA consultation with stakeholders, the Board considered and approved a new Self-insurance Licensing framework. The Board noted that the implementation of the framework will be supported by a new self-insurer supervision model.
The Board also considered new proposed Guidelines for Workplace Return to Work Programs. Noting that SIRA had conducted consultation to develop new Guidelines to improve the customer experience, deliver improved return to work outcomes, and reduce regulatory burden, the Board was pleased to endorse the Guidelines for release.
The Board also received an update on the SIRA Data and Digital Strategy, designed to improve the customer experience for direct users of the NSW Motor Accidents (CTP) Scheme and the monitoring of the scheme.
Other issues considered at the March 2017 Board meeting included:
- A progress update on CTP Scheme Reform.
- An update on the transition strategy relating to Section 39 of the Workers Compensation Act 1987, whereby SIRA is working with key stakeholders to facilitate benefit pathways, support programs and return to work assistance for those claimants facing the expiry of their benefits in certain circumstances after five years.
- The requirements, implications and potential impact of adopting common guidelines for the evaluation of individuals’ permanent impairment status for both the workers compensation and CTP schemes in NSW. It was agreed that this is not feasible until the revised CTP system has matured somewhat.
- Consideration of a background paper on the impact of lump sum compensation on injury recovery and return to work, including a summary of the available evidence on the impact of seeking financial compensation.
- Government reform of the Home Building Compensation Scheme, and an update from actuaries on the Scheme.
- An update on Staff Engagement activities underway across SIRA, and future planned activities for 2017 to improve culture, engagement and leadership including:
- The staff survey specific to the Better Regulation Division (including SIRA) was launched, and closed on 17 March 2017. The analysis of survey results is underway and will inform the monitoring of progress against the NSW People Matter Employee Survey objectives.
- The second divisional ‘Road to Success’ roadshow is on track to occur in May 2017, to deliver communications from the Deputy Secretary, Better Regulation and the Chief Executive, SIRA about key business priorities, mechanisms for engaging staff, and divisional culture.
Chairperson, SIRA Board
In late 2016, the SIRA Board agreed on a targeted program of regular strategic discussions. At its 23 February meeting, the Board focused on its inaugural strategic discussions for 2017. The Board discussed SIRA’s values and principles as a contemporary regulator – a foundation for future strategic discussions. The Board also thoroughly discussed Compulsory Third Party premium regulation, and endorsed SIRA’s documented risk-based regulatory approach to CTP premiums.
As part of the SIRA mandate to ensure better availability of premium information to insurers, the Board considered a policy proposal on Workers Compensation Financial and Premium Supervision. In endorsing the policy position, the Board approved revised Workers Compensation Market Practice and Premiums Guidelines and revised Workers Compensation Licensed Insurer Business Plan Guidelines, which were consulted on in 2016. SIRA anticipates publishing the revised Guidelines on 1 March 2017.
The Board reflected on further advice on the review and revision of capital and prudential requirement to inform implementation of an improved framework that will apply to the various types of insurers operating in the NSW workers compensation system. Noting the outcomes of SIRA consultation regarding prudential standards and security requirements of workers compensation insurers, the Board will consider the self-insurer licensing framework at its meeting in March 2017.
The Board also noted that SIRA is reviewing the capital requirements for Specialised Insurers (including a mix of private and Government insurers) through the current review of the Specialised Insurer licensing conditions.
As part of a rotating schedule of reporting to the Board on the operating performance of SIRA Dispute Resolution Services (DRS), the Board considered the 2016 Annual Calendar Year Update reflecting a high level overview of annual trends in the services. The Board was very pleased to note the high-quality presentation of the report, and the significant improvements and positive trends in services provision including evidence of significantly improved case management and decision making processes for special assessments of procedural disputes referred to Claims Assessment Resolution Services. This report will be made available as part of scheduled stakeholder engagement sessions in March 2017.
Detailed discussion ensued on the Compulsory Third Party (CTP) Premium System Review and particularly the Risk Equalisation Mechanism (REM), a key instrument to provide better equity for consumers, pricing of risks for insurers, and strengthening of system integrity. Noting the planned start date of 1 May 2017 for the REM, the SIRA Board considered a number of critical issues impacting implementation. These included availability of a Clearing House Service Provider, the need for further review of the REM Deed and some current insurer filings, and an independent assessment of aspects of the REM commissioned in response to concerns raised with SIRA.
Acknowledging that any changes to implementing the REM may impact on insurers, the Board requested that CTP insurers be advised immediately after the Board Meeting of SIRA’s continued commitment to the REM and the Board-approved:
- delay in the start date of the REM until 1 July 2017;
- delay in the effective date of the Premium Determination Guidelines and the new Premium Relativities to the same date; and
- that further information about the filing process for the 1 July effective date would soon be provided.
Other issues considered at the February 2017 Board meeting included:
- CTP Scheme Reform, with the anticipated upcoming release of the findings of consultation on insurer profits and insurer claims handling and dispute resolution.
- Home Building Compensation, noting a further status update will be provided at the Board Meeting in March 2017.
An update on Staff Engagement activities underway across SIRA, and future planned activities for 2017 to improve culture, engagement and leadership including:
- The launch of a staff survey specific to the Better Regulation Division (including SIRA);
- A 2017 staff engagement calendar developed to provide transparency on activities, plans and events; and
- Introduction of an anonymous drop box as an avenue for staff to provide anonymous feedback, suggestions or complaints directly to the Deputy Secretary Better Regulation / Chief Executive SIRA.
Chairperson, SIRA Board
The calendar year schedule of Board Meetings generally commences in February.
The SIRA Board did not meet this month.