Recovery plans re-audit scheme report

Insurer claims and conduct assurance program

December 2023

1. Introduction

The NSW Compulsory Third Party (CTP) insurance scheme is established under the Motor Accident Injuries Act 2017 (the Act). In conjunction with the Act, Guidelines support the delivery of the objects of the Act by establishing principles and requirements to ensure timeliness, fairness, transparency and better outcomes and experiences for injured people accessing the CTP scheme. The Act and the Guidelines also set out the requirements relating to the management of recovery plans including risk screening as a result of a motor crash in NSW.

The State Insurance Regulatory Authority (SIRA) is the independent regulator of statutory schemes in NSW, including CTP. In line with Division 9.1 of the Act, SIRA has issued licenses to six insurers who operate within the scheme. These licenced insurers are required to adhere to the duties and obligations placed on them under the Act, Guidelines and the conditions of their licence. SIRA has a statutory function to monitor the compliance of the licensed insurers and authority to publish information about their level of compliance with the duties and obligations imposed.

SIRA conducted an Insurer Claims and Conduct Assurance Program (ICCAP) activity in October 2022 regarding recovery planning and risk screening. All insurers were required to provide remediation plans for areas where compliance was not at expected levels.

In accordance with its statutory functions and pursuant to section 10.24 of the Act, SIRA conducted a risk based re-audit in October 2023 to review the effectiveness of insurers remediation plans and confirm compliance with the requirements as set out in the Act, Motor Accident Guidelines (MAGs) and licence conditions.

Given the risk based approach to the re-audit, it is noted that Allianz Australia Insurance Limited trading as Allianz (Allianz) was not reviewed as part of this ICCAP based on their performance in the initial audit, subsequent completion of remediation activities to achieve recovery outcomes and a demonstration of strong customer outcome and experience performance through metrics monitored by SIRA.

This report outlines the findings of the ICCAP on the information provided by insurers and access to their claims management platform. SIRA notes and appreciates the licensed insurer’s engagement and transparency throughout this activity.

2. Claims file review

2.1 Overview


Insurers	AAI Limited trading as AAMI (Suncorp) AAI Limited trading as GIO (Suncorp) Insurance Australia Limited trading as NRMA Insurance (NRMA) QBE Insurance (Australia) Limited trading as QBE (QBE) Youi Pty Ltd (Youi)
File review date	File reviews were conducted during October 2023.
Scope	The audit is conducted in accordance with SIRA’s statutory power pursuant to section 10.24 of the Act. The claims file review was tailored to each insurer’s remediation plans and aimed to review insurer’s systems to relevantly comply with: Compliance in relation to the recovery plan requirements as defined in the MAGs (4.82 – 4.95 v.9.1) Establishing compliance measures in line with the insurer’s Licence Condition 10. SIRA’s Customer Service Conduct Principles in line with the insurer’s Licence Condition 2.
Criteria	See appendix 1
Review cohorts	Stratified random sample of claims comprised of: Cohort 1 – Claimants with an initial recovery plan, 10 claims (claims lodged during the period 1 July to 1 October 2023) Cohort 2 – Claimants with a subsequent recovery plan, 10 claims (claims lodged within the last 12 months with a subsequent recovery plan issued in the period 1 July to 1 October 2023) Cohort 3 – Claimants who have had an initial recovery plan review and been determined as not requiring a recovery plan, 10 claims (claims lodged during the period 1 July to 1 October 2023).
Access to information	Insurers provided SIRA with unrestricted access to their claims records and claims representatives to assist in the completion of the review. The SIRA reviewers engaged with insurer claims representatives throughout the review to highlight potential non-compliances and gather further information to assess and determine compliance. Through this process, insurers were also afforded the opportunity to provide SIRA with their views in relation to the non-compliance. Insurer responses were considered prior to the Lead Auditor making a final determination.

2.2 Results

Scheme

The insurers demonstrated an overall file review result of 77%. The review criteria were comprised of two elements – Compliance and Customer Service Conduct Principles. This result demonstrates an overall improvement of 21 percentage points when compared to the initial Recovery Plan ICCAP¹ conducted in 2022.

Figure 1. Scheme results

In relation to individual obligations, insurers demonstrated the strongest compliance against criterion five (99%) in respect of the fulfilment of the insurer’s obligations under the recovery plan established for the claimant.

The lowest area of compliance was demonstrated against criterion seven (48%) in respect of the insurers adherence to the minimum requirements to be included in recovery plans and the provision of the recovery plan to the claimant and their nominated treating doctor. Further issues were identified regarding criterion one (66%) in relation to the insurers obligations to screen and assess the risk of poor recovery where risk screening was often conducted without attempting to contact the claimant and / or completed outside the prescribed timeframes.

Figure 2. Scheme result by audit criteria (refer to Appendix 1 for criteria detail).

(^*Youi not included.)

Insurer

At an insurer level, Suncorp received the highest overall result of 80%. Suncorp and NRMA both scored the highest result in relation to Compliance (80%) and Suncorp scored the highest result in relation to Customer Service Conduct Principles (80%).

QBE received the lowest overall score of (70%) and scored the lowest result in relation to Compliance (69%). NRMA and Youi both scored the lowest result in relation to the Customer Service Conduct Principles (69%).

Figure 3. Insurer results

2.3 Observations

Improvement was demonstrated from all insurers from the initial audit undertaken in October 2022 in respect to insurers meeting their obligations regarding the provision of recovery plans and risk screening.
The results show an overall improvement with risk screening compared to the initial Recovery Plan ICCAP, however further improvement is still required in order to ensure early assessment of risk and identification of appropriate support for the claimant. Risk screening was commonly completed by insurers without contacting the claimants (or attempting to contact the claimant). As a result, risk screening was observed to be performed on the basis of the papers which does not provide for as effective screening for risk of poor recovery and opportunities for early intervention.
It was observed that all insurers have developed a risk screening tool. These tools (when utilised) commonly facilitated good conversation between the claimant and insurer and considered psychological, behavioural and social factors. It was not always apparent that the information collected through the risk screening process was considered in developing recovery plans.
Recovery plans were largely completed within prescribed timeframes. Non-conformances with 4.86 of the MAGs were due to recovery plans not being considered tailored where insurers did not consider relevant information related to the claim in the recovery plan.
Insurers demonstrated varying levels of consultation with claimants and relevant stakeholders in the recovery planning process. The opportunity remains to improve coordination between all stakeholders involved in supporting a claimant to develop a tailored and coordinated recovery plan.

3. Regulatory response

All insurers were provided with an individual report from the ICCAP activity outlining their results, details of non-conformances and required actions.

Based on the findings of the management of recovery planning and screening, the following actions will be undertaken:

Action 1: Insurers are required to review their current remediation plans to address the obligations identified through this reaudit where substantial non-compliance was not demonstrated to ensure systematic compliance is embedded.
Action 2: SIRA will monitor the implementation of the remediation plans on a monthly basis. Remediation plan requirements will be monitored until SIRA is satisfied that substantial compliance is being achieved.
Action 3: SIRA will consider further independent assurance activities based on risks presented by each insurer.
Action 4: In 2024, SIRA will review the Guidelines to determine whether changes are appropriate to deliver improved outcomes.
Action 5: SIRA will consider further regulatory action in relation to specific insurers who demonstrate ongoing non-compliance in the management of recovery planning and risk screening.

Appendix 1 – Review criteria

Criteria	Clause reference	Clause description
1	MAGs 4.82	A claimant must be screened initially for risk of poor recovery and opportunities for early intervention within three business days of lodgement of their claim. This must include direct contact with the claimant where available and consideration of recent information by the treating doctor. The outcome of this screening must be recorded on the claimant’s file
2	MAGs 4.83	Where a claimant is identified to be at or above a medium risk of poor recovery, the insurer must take action to support the claimant through the appropriate internal claims management stream. The insurer should conduct a comprehensive assessment to determine the relevant actions to address identified risks. The outcome of this assessment must be integrated into the claimant’s recovery plan.
3	MAGs 4.86	All claimants must have a tailored recovery plan with the following exceptions: (a) where the claimant is performing their pre-injury duties, (b) where the claimant is performing their usual activities, (c) where the claimant is part of the Lifetime Care & Support Scheme, (d) where the claim is denied, (e) where a claimant has returned to their pre-injury duties and activities within 28 days of the claim being made.
4	MAGs 4.88	The recovery plan must be established in consultation with the: (a) claimant who has an obligation under the Act to minimise loss and participate in reasonable and necessary treatment and care and rehabilitation, (b) recent status of the claimant from the claimant’s treating doctor, (c) claimant’s employer, where the claimant has authorised contact with the employer and the employer elects to be part of recovery, and to the maximum extent that their cooperation and participation allows, (d) any treating clinicians or therapists as appropriate.
5	MAGs 4.90	An insurer must fulfil its obligations under any recovery plan they have established for a claimant.
6	MAGs 4.91	The recovery plan must be: (a) developed in consultation with the claimant, (b) completed within 28 days of the claim being made or within 28 days of the claimant’s initial discharge from hospital in circumstances where the claimant has been admitted to hospital within two days of the date of the motor accident and remained in hospital for a period of not less than three continuous weeks whichever is the later, (c) reviewed no less than at 12 weekly intervals or as pertinent changes occur, (d) followed up with the claimant regularly.
7	MAGs 4.94	Within the recovery plan that is developed with and sent to both the claimant and their nominated treating doctor, the following details must be included at a minimum: (a) name of claimant, (b) claim number, (c) date of injury, (d) current need for treatment and care and psycho-social support, being provided (including vocational and community support where relevant), (e) likely future need for treatment and care and psycho-social support being provided (including vocational and community support where relevant), (f) current fitness for work and/or usual activities, (g) expected fitness for work and/or usual activities, (h) obligations of the claimant, (i) consequences for the claimant if they do not adhere to the recovery plan, (j) contact details of the insurer representative, (k) what action the claimant can take if they disagree with the recovery plan.
8	MAGs 3.33(b)	An insurer must: (b) provide up-to-date, accurate and complete claims data to the Universal Claims Database (UCD), in accordance with the Act and the UCD Claims Data Manual, as amended from time to time or as otherwise required by the authority.
9	Licence condition 2 (Customer Service Conduct Principles)	In the management of the claim, did the insurer conduct itself in line with the Customer Service Conduct Principles?

¹ It is noted that the two ICCAP activities are not a true like for like comparison. The criteria audited for each insurer was tailored specific to obligations that were subject to remediation after the initial ICCAP.