Insurance Premiums Order 2015–2016

This Order is the Insurance Premiums Order 2015–2016.

This Order commences at 4 pm on 30 June 2015 and must be published in the Gazette.

The premium payable by an employer for a policy of insurance is to be calculated by requiring the premium to be calculated for a period of insurance of not more than 12 months and:

if the employer is an experience-rated employer for the purposes of the policy, in accordance with the following formula:

if the employer is a small employer for the purposes of the policy, in accordance with the following formula:

where:

P is the premium for the time being payable by the employer in respect of the period of insurance to which the policy relates, being:

except as provided by paragraph (b), the initial premium so payable in accordance with this Order, or

where adjustments are required to be made to that premium by reason of the operation of this Order, the premium so payable by reason of those adjustments.

BTP is the basic tariff premium for the employer, calculated with respect to the period of insurance in accordance with Schedule 3.

CPA is the claims performance adjustment for the employer calculated with respect to the period of insurance in accordance with Schedule 4.

ESI is the employer safety incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 10.

ESR is the employer safety reward, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 12.

PD is the performance discount, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 13.

Q is the premiums adjustment contribution, if any, for the employer.

D is the dust diseases contribution, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 9.

M is the Mine Safety Fund premium adjustment, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 7.

A is the apprentice incentive amount, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 8.

RTWI is the return to work incentive, if any, for the employer calculated with respect to the period of insurance in accordance with Schedule 11.

An employer (other than a small employer) is entitled to a discount of 3 percent on the initial premium payable by the employer for a policy of insurance if:

the period of insurance to which the policy relates is 12 months (or a period of less than 12 months if the policy is issued to an employer who is a member of a group to enable the policy to renew on the same date as the policies of other members of the group), and

the employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and

the employer has not elected to pay the premium by instalments, and

the employer has notified the insurer, in accordance with the regulations, of the reasonable estimate of the wages that will be payable during the period of insurance.

Note—

Clause 147 of the Workers Compensation Regulation 2010 requires an employer to notify the insurer concerned of the matter referred to in paragraph (d).

A small employer is entitled to a discount of 5 percent on the initial premium payable by the small employer for a policy of insurance if:

the period of insurance to which the policy relates is:

12 months, or

a period of less than 12 months but only if the policy is issued to a small employer who is a member of a group to enable the policy to renew on the same date as the policies of other members of the group, or

a period of less than 12 months but only if the policy is issued to a small employer to enable the policy to expire at the end of a month, and

the small employer has paid the discounted amount of the premium in full by the date on which payment of the premium is due, and

the small employer has not elected to pay the premium by instalments.

For the purposes of the definition of prescribed excess amount in section 160 (1) of the Act, the following excess amount is specified:

if the employer concerned notified the relevant insurance scheme agent of the injury that led to the weekly compensation claim of the worker within 5 days of the employer becoming aware of it—$0,

in all other cases—the lesser of the following:

the amount that is the weekly payment of compensation to which the worker is entitled as determined by section 36 of the Act,

$1,999.30.

Note—

Under section 160 (2) of the Act, an employer is required to repay the prescribed excess amount to the insurer under a policy of insurance in respect of each weekly compensation claim that the insurer has paid under the policy. However, if the amount that the insurer has paid in respect of any such claim is less than the prescribed excess amount, the amount the employer must repay is that lesser paid amount.

For the purposes of sections 170 (8) and 172 (5) of the Act, the prescribed rate is 0.825% per month compounded monthly.

For the purposes of clause 152 (1) (a1) of the Workers Compensation Regulation 2010, the cost of claims, in relation to an injury year related to, or a period of insurance for, a policy, means the total of the costs of each individual claim of which the insurer has notice at the time of renewal of the policy concerned, being a claim made against a particular employer with respect to an injury received (or that is deemed by the Act or the former Act to have been received) during a prior injury year or the period of insurance, whichever is relevant, but not including any claim under section 10 (Journey claims) or 11 (Recess claims) of the Act.

Note—

Clause 152 (1) of the Workers Compensation Regulation 2010 provides that, in any case where a single event leads to 3 or more individual claims, the total costs of all those claims in relation to that event are not to exceed the amount that is twice the relevant large claim limit for the policy.

In subclause (1), the cost of an individual claim (C) is to be calculated using the following formula:

where:

C is the cost of the individual claim.

CC is the unadjusted costs of the individual claim calculated in accordance with subclauses (3)–(5).

R% is the amount recovered as a percentage of the total cost of an individual claim calculated in accordance with subclause (6).

RTWI% is the return to work incentive percentage for the employer and is:

for a small employer—0, and

for an experience-rated employer—calculated with respect to the period of insurance in accordance with subclause (7).

In subclause (2), CC is $150,000 (being the large claim limit for the policy) or the sum of the following at the commencement of the period of insurance, whichever is the lesser:

weekly compensation payments, if any, made by the insurer in respect of the claim pursuant to the Act,

provisional weekly payments of compensation, if any, under Part 3 of Chapter 7 of the 1998 Act by the insurer, being payments of compensation on the basis of provisional acceptance of liability to a worker,

the payments, if any, of permanent impairment under section 66 (Entitlement to compensation for permanent impairment) of the Act made by the insurer either in satisfaction of judgments relating to the claim or in settlement of the claim,

the payments, if any, made by the insurer in respect of the claim pursuant to Division 9 (Commutation of compensation) of Part 3 (Compensation—benefits) of the Act either in satisfaction of judgments relating to the claim or in settlement of the claim,

the payments, if any, made by the insurer in respect of the claim pursuant to section 25 (Death of worker leaving dependants) of the Act,

the payments, if any, of damages at common law and under the Compensation to Relatives Act 1897 made by the insurer either in satisfaction of judgments relating to the claim or in settlement of the claim,

whether the payments were made or the fees, expenses or costs were paid during or after the injury year or period of insurance in which the injury to which the claim relates was received (or is deemed by the Act or the former Act to have been received).

However, CC does not include any amount that section 54 (4) (b) of the 1998 Act (Second-injury scheme) requires to be excluded from the claims experience of the employer.

For the purpose of subclause (3), if an employer, after the renewal of a policy, requests reimbursement of any weekly compensation payments in respect of a period of incapacity before that renewal, the Nominal Insurer may adjust the amount of weekly compensation payments and re-calculate the employer’s premium.

In subclause (2), R% is to be calculated using the following formula:

where:

R is the sum of amounts recovered by the insurer in relation to any individual claim, but:

does not exceed TCC, and

does not include amounts recovered under section 160 of the Act.

TCC is the total cost of an individual claim calculated in accordance with clauses 152–155 of the Workers Compensation Regulation 2010 as if the policy were issued so as to take effect immediately before 4 pm on 30 June 2015.

In subclause (2), the return to work incentive percentage RTWI% for an experience-rated employer is to be calculated as follows:

if the claim was made against a policy that took effect at or after 4 pm on 30 June 2015 and the injured worker returned to sustained suitable employment within a period specified in Column 1 of the Table to this subclause, the percentage rate specified in Column 2 of the Table that corresponds to that period,

Table

Column 1

Column 2

Return to work period after date of injury:

RTWI%

Less than 13 weeks

0.15

13 weeks or greater but less than 26 weeks

0.1

26 weeks or greater but less than 52 weeks

0.05

in any other case, in accordance with the following formula:

In subclause (7), sustained suitable employment means suitable employment for a period of at least 3 consecutive months before the commencement of the period of insurance concerned.

The exemption limit (within the meaning of section 155AA (8) of the Act) for the following employers for the 2015–2016 financial year is fixed at $0:

an employer who carries on a business that is covered by Table A classes 612310, 612315, 612320, 612322, 612324, 612326, 612330, 931120, 931130, 931930, 931940 or 931950 (being classes that refer to a per capita rate), regardless of whether the employer carries on any other business,

an employer who carries on a business in the thoroughbred racing industry and who is required by the Rules of Racing (within the meaning of the Thoroughbred Racing Act 1996) to hold a policy of insurance with Racing NSW, regardless of whether the employer carries on any other business.

Note—

The effect of fixing the exemption limit for the specified employers at $0 is that those employers will not be exempt employers within the meaning of section 155AA (Exempt employers not required to obtain policy of insurance) of the Act.

An employer may apply to the Nominal Insurer to have the employer’s premium for the period of insurance adjusted downward if the new premium percentage rate is more than 1.3 times greater than the old premium percentage rate.

This clause does not apply if the new premium percentage rate is greater than the old premium percentage rate solely because of:

a change to a classification under the Insurance Premiums Order 2014–2015 to a classification under this Order (both classifications being correct), or

a change of business activity.

The Nominal Insurer may issue guidelines for or with respect to any of the following:

the manner in which applications under this clause are to be made,

criteria for determining how downward adjustments are calculated,

other matters relevant to the transition to the calculation of premiums under this Order.

If the Nominal Insurer calculates a downward adjustment of a premium, the insurer must redetermine the employer’s premium in accordance with that downward adjustment.

A downward adjustment, or an application for a downward adjustment, under this clause is not a disputed aspect for the purposes of section 170 of the Act.

In this clause:

new premium percentage rate, in relation to an employer, means a percentage rate calculated in accordance with the following formula:

where:

BTP is the basic tariff premium for the employer, calculated with respect to the period of insurance in accordance with Schedule 3.

CPA is the claims performance adjustment for the employer calculated with respect to the period of insurance in accordance with Schedule 4.

W₀ is the total wages payable to workers by the employer in respect of the period of insurance for which the premium is to be calculated.

old premium percentage rate, in relation to an employer, means a percentage rate calculated in relation to the premium for the period of insurance immediately preceding the current period of insurance:

if the employer was a medium or large employer (within the meaning of the Insurance Premiums Order 2014–2015) for the purposes of calculating that premium, in accordance with the following formula:

if the employer was a small employer (within the meaning of that Order) for the purposes of calculating that premium, in accordance with the following formula:

where E, S, T and W₀, are the amounts calculated in accordance with the Insurance Premiums Order 2014–2015 to determine the employer’s premium for the period of insurance immediately preceding the current period of insurance.

Schedules 1–16 form part of this Order.