Enforceable undertakings factsheet

An enforceable undertaking (EU) is one way the State Insurance Regulatory Authority (SIRA) may respond to non‑compliance by an insurer. This fact sheet explains, in simple terms, what an EU is and how it works.

What is an enforceable undertaking?

An enforceable undertaking is a voluntary, legally binding agreement between an insurer and SIRA.

It sets out actions the insurer agrees to take to address a contravention of workers compensation legislation.

An EU:

• is not an admission of guilt
• becomes legally enforceable once SIRA accepts it
• can be enforced by a court if it is not complied with
• is made under Division 4A of the Workers Compensation Act 1987 (NSW).

Why might an insurer offer and enforceable undertakings

An EU can:

• fix problems quickly
• improve systems, governance or training
• deliver real benefits for workers, employers and the scheme
• avoid prosecution or civil penalties for the same issue (if the EU is complied with).

SIRA decides whether an EU is an appropriate response in each case.

When does an enforceable undertaking start?

An EU starts:

• when SIRA notifies the insurer that it has accepted the undertaking, or
• on a later date if SIRA specifies one.

From that date, the insurer must comply with all commitments in the EU.

What does SIRA look for when deciding whether to accept an enforceable undertaking?

SIRA makes decisions on a case-by-case basis, having regard to the specific facts of each matter and consistent with its Regulatory Framework.

SIRA may consider:

• how serious the issue is
• the impact on workers, employers and the scheme
• the insurer’s compliance history
• whether the proposed actions are clear, measurable and achievable
• whether the EU is likely to fix the issue and prevent it happening again
• whether accepting the EU is in the public interest.

SIRA’s acceptance of an EU is discretionary.

When is an enforceable undertaking not suitable?

An EU is unlikely to be accepted if:

• there is serious non‑compliance needing urgent action
• the conduct involved deliberate or repeated wrongdoing
• the insurer is trying to delay or avoid stronger regulatory action.

What must an enforceable undertaking include?

Every EU is different. However, a strong proposal generally includes:

• a clear description of the issue
• actions to fix the problem and prevent it recurring
• timeframes and milestones
• how progress will be reported and verified
• benefits for workers, employers or the scheme
• assurance that the insurer has the resources to deliver the commitments.

Commitments should be specific, measurable and time‑limited.

Further information about what to include in an EU can be found in SIRA’s Enforceable Undertaking Framework.

What cannot be included in an enforceable undertaking?

An enforceable undertaking cannot include:

• denial of liability
• vague or unenforceable commitments
• obligations placed on SIRA
• attempts to reduce or replace existing legal obligations.

How does an insurer propose an enforceable undertaking?

An insurer may submit a written EU proposal to SIRA.

Insurers are encouraged to:

• contact SIRA early to discuss whether an EU may be appropriate
• submit a written proposal using SIRA’s EU template
• provide all required information to support assessment.

Important things to know:

• Proposing an EU is not an admission of guilt.
• SIRA may ask for further information before making a decision.

What happens once an enforceable undertaking is accepted?

SIRA will:

• notify the insurer in writing of the decision
• give reasons for accepting or rejecting the EU
• publish the decision on its website
• monitor compliance.

Once accepted:

• the EU becomes legally binding
• the insurer must meet all commitments in full
• no court proceedings or civil penalties can proceed for that matter while the EU is in force.

Can an enforceable undertaking be changed or withdrawn?

An enforceable undertaking can only be varied or withdrawn with written agreement from both the insurer and SIRA.

SIRA will publish notice of any change or withdrawal.

What if an enforceable undertaking is contravened?

If an insurer breaches an enforceable undertaking, SIRA may apply to the District Court to:

• order compliance
• impose a monetary penalty
• make other enforcement orders.

Are enforceable undertakings made public?

Yes.

SIRA publishes:

• accepted enforceable undertakings
• variations or withdrawals
• non‑compliance outcomes
• progress and completion information.

This supports transparency and trust in the scheme.

How do enforceable undertakings fit with other insurer obligations?

An enforceable undertaking does not replace or remove existing insurer obligations.

Insurers must comply with all workers compensation laws and regulatory obligations at all times.

Need more information?

Further information can be found in SIRA’s Enforceable Undertaking Framework.

If you are considering an enforceable undertaking or want to discuss suitability:

• contact your SIRA supervision manager, or
• visit the State Insurance Regulatory Authority (SIRA) website.