SIRA issues Letter of Censure to icare for failure to apply indexation to workers compensation
29 January 2024
SIRA has issued a Letter of Censure to icare in respect of the failure to correctly apply indexation to workers compensation claims managed by the Nominal Insurer (NI) on its claims management system Guidewire, since its inception in 2019 to October 2022. This impacts payments made in that period to a person on a workers compensation claim managed by the NI.
icare first advised SIRA in September 2022 of a potential issue in the NI of non-compliance in the indexation of workers pre-injury average weekly earnings (PIAWE) on historical claims managed prior to the introduction of the Guidewire claims management system. SIRA sought confirmation at this point that icare had undertaken actions to validate that Guidewire controls had been effective in the indexation process for those managed on the system since 2019.
icare and SIRA engaged on an ongoing basis at both operational and executive levels around possible concerns with claims managed on the Guidewire system. SIRA’s primary concern in pressing this issue was that workers with claims managed on the Guidewire system were not receiving their full weekly entitlement.
On 4 August 2023, SIRA utilised its powers under s194 of the Workers Compensation Act 1987 (the Act), directing icare to undertake a complete analysis of all claims managed on Guidewire to ensure compliance with division 6A, Part 3 of the Act.
On 30 November 2023 icare confirmed to SIRA, that up to 13,915 workers whose claims were managed on Guidewire had not received their full entitlements, with a total remediation estimated to be up to $14.7 million. icare provided SIRA with a plan to deliver remediation payments to the affected workers by June 2024, and advised that improvements to the Guidewire system are being implemented.
SIRA determined the Nominal Insurer had contravened Division 6A of Part 3 of the Act and has issued a Letter of Censure for the failure of the Guidewire claims management system to index workers weekly payments in line with the legislative requirements.
SIRA will continue to supervise icare’s remediation plan through to completion.
As a result of this issue, SIRA has also undertaken assurance activities with all other workers compensation insurers in NSW to ensure indexation of weekly payments to workers has been correctly applied in line with the legislative requirements. SIRA continues to engage with insurers on this matter to ensure that where necessary, appropriate remediation measures are being undertaken. SIRA will consider further regulatory action with insurers where there is ongoing non-compliance with the legislation or failure to remediate.
Further information
- SIRA Letter of Censure issued under section 183A(1)(b) Workers Compensation Act 1987- workers compensation Nominal Insurer failure to apply indexation to workers compensation claims.
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