Cost of claims: clause 152 (1) (a1) of the Regulation
7 Cost of claims: clause 152 (1) (a1) of the Regulation
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.
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