In this issue: Consultation on draft Market Practice and Premiums Guidelines (MPPGs), a recent Supreme Court decision, and a report on NSW arrangements for the calculation of pre-injury average weekly earnings (PIAWE).
Consultation on draft Market Practice and Premiums Guidelines
Consultation is now open for the Market practice and premium guidelines (MPPGs).
In late September and throughout October, SIRA met with licensed insurers and various stakeholders to discuss the upcoming workers compensation MPPGs for 2018/19. During those consultations, SIRA opened discussions on some key areas under review for a better workers compensation system and for greater transparency for employers.
The MPPG will apply to premium filings provided to SIRA on or from March 2018 until the guidelines are revised or revoked.
SIRA has now drafted the workers compensation MPPG’s for 2018/19 and we are now seeking comments on the draft prior to finalising for publication.
The guidelines specify:
- the minimum requirements for policies of insurance
- how insurers are to present premium filings to the Authority (SIRA)
- how the Authority will assess those filings and
- the minimum standard of market practices required by licensed insurers.
The MPPG apply to all ‘licensed insurers’ as per the Workers Compensation Act 1987, including the Nominal Insurer and specialised insurers. The following entities are exempt from the requirements of the guidelines:
- Self Insurance Corporation (SICorp)
- Coal Mines Insurance.
Recent Supreme Court Decision
The NSW Supreme Court handed down its decision on 22 November 2017 in relation to the matter of Hunter Quarries Pty Limited v Alexandra Mexon as administrator for the estate of Ryan Messenger.
In September 2014, the worker sustained fatal crush injuries when an excavator he was operating tipped over. His dependants received a lump sum death benefit under section 25 of the Workers Compensation Act 1987 (the 1987 Act). His estate later sought permanent impairment compensation under section 66 of the 1987 Act.
The worker was initially assessed by an Approved Medical Specialist (AMS) at 100 per cent permanent impairment. Following an application for reconsideration, an AMS certified he suffered zero per cent permanent impairment, which was appealed to the Medical Appeal Panel of the Workers Compensation Commission. The appeal panel revoked the certificate and issued a new certificate which assessed impairment at 100 per cent.
Judicial review was sought by Hunter Quarries of the appeal panel’s decision. SIRA was granted leave to appear as amicus curiae (friend of the court).
The court dismissed Hunter Quarries’ application and found in favour of the worker’s estate. The court found that the worker suffered 100 per cent 'permanent impairment' attracting the maximum compensation provided for by section 66 even where death followed not long after the injury. The court explained that when a worker suffers an injury so serious that the worker cannot recover it from there is 'permanent impairment'.
The time period for an appeal has not yet expired.
Report on NSW arrangements for the calculation of pre-injury average weekly earnings (PIAWE)
Professor Tania Sourdin’s Report on NSW Workers Compensation Arrangements in Relation to Pre-Injury Average Weekly Earnings (PIAWE) has now been published on SIRA’s website.
PIAWE is used in the calculation of weekly benefits paid where a worker is unable to perform their pre-employment work, or suitable alternative duties, as a result of a work-related injury or illness.
Following SIRA’s public and stakeholder consultation on the regulation of PIAWE in 2016, Professor Sourdin was engaged as an independent expert to further consult, evaluate and articulate the issues impacting on PIAWE in NSW.
The report considered, at a high level, the reform options available to improve and simplify the calculation of PIAWE and improve the customer experience. A legislative approach to reform was recommended by Professor Sourdin, supported by process and system improvements.
SIRA is further considering the practical application of the recommendations.