NSW insurer icare could owe $40 million in remediation
NSW insurer icare could owe $40 million in remediation | Insurance Business Australia
Life & Health
NSW insurer icare could owe $40 million in remediation
Around 20,643 claims might require review and remediation
Life & Health
By
Roxanne Libatique
New South Wales (NSW) public sector insurer icare has announced that it will review and address a historical issue affecting the indexation of benefits for injured workers across Nominal Insurer and Treasury Managed Funds, with Deloitte have slapped a remediation value price tag of up to $40 million on the issue.
After the review, which included accessing information in the decommissioned systems, icare found a possible 20,643 claims that might require review and remediation after excluding correctly indexed and low-balance claims – with approximately 16,800 NI claims and 3,800 TMF claims affected, around 6.6% of the total claims.
Deloitte has estimated a maximum remediation value of $40 million, which could reduce significantly after reviewing claims and confirming the correct indexation application, icare said.
“icare apologises to any injured worker who has been impacted by these errors. icare did not create this issue, but we are taking responsibility to fix it. This issue started more than 10 years ago, and we discovered it, thanks to our improved processes and systems. Fixing this issue is part of icare’s commitment to continuous improvement. When we find a problem, we are open about it, and we work very hard to fix it”,” said icare managing director and CEO Richard Harding.
icare will implement a remediation program that leverages the previously approved PIAWE Review and Remediation program, it said.
NSW workers compensation laws
Under NSW workers compensation laws, injured workers receiving weekly benefits are entitled to an indexed adjustment to their benefit every April and October, calculated on Australia’s National Statistical Agency (ABS) Wage Practice Index published every quarter. In 2012, the government introduced legislative reforms that included new and complicated provisions related to indexation. However, icare did not exist at that time, with the guidance and oversight of the indexation’s application coming from WorkCover.
From 2012 to 2019, employers and workers were responsible for providing additional pay details to inform eligibility and enable the Claims Service Provider (CSP) to process indexation. The indexation anomalies were related to claims from this period, managed on legacy systems run by external CSPs before icare was set up.
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