The NSW government and WorkCover NSW are making changes to the NSW Workers Compensation Scheme.

These changes are designed to improve the insurance services, medical management and return to work programs of the scheme and, ultimately, reduce costs for employers across the State.

On 31 October 2005, WorkCover NSW CEO Jon Blackwell announced the seven organisations that will operate as agents in the workers compensation scheme and deliver claims and policy management services under commercial contracts.

The organizations are: Allianz Australia Pty Ltd, Cambridge Integrated Services Pty Ltd, CGU Insurance Ltd, Employers Mutual Ltd, Gallagher Bassett Services Workers, Compensation New South Wales, GIO Insurance Ltd, QBE Insurance Ltd.

The move from open-ended licences to commercial contracts has been an integral part of the NSW government’s reform to the scheme and was a key recommendation of the Partnerships for Recovery report prepared by McKinsey & Company.

For further information on the changes see details below, or visit www.workcover.nsw.gov.au which includes answers to frequently asked questions.

Improving the NSW workers compensation scheme

The NSW workers compensation Scheme is changing for the better.

The NSW Government is implementing reforms to the NSW workers compensation Scheme that aim to improve services and outcomes for injured workers and employers.

New insurance arrangements

A new workers compensation insurance entity, the WorkCover Scheme, began operating from 1 July 2005. As a result, the licensing arrangements that previously applied to insurers who offer workers compensation services have changed.

WorkCover NSW has appointed Agents to provide workers compensation claims and policy services under commercial contracts.

In March 2005, WorkCover NSW released a tender for suitable organisations to provide workers compensation claims and policy services in NSW under commercial contracts.

The seven organisations, including two new entrants to the NSW workers compensation system, will operate as agents in the Scheme and deliver claims and policy services under commercial contracts. The organizations are: Allianz Australia Pty Ltd, Cambridge Integrated Services Pty Ltd, CGU Insurance Ltd, Employers Mutual Ltd, Gallagher Bassett Services Workers, Compensation New South Wales, GIO Insurance Ltd, QBE Insurance Ltd.

More competition, better service By opening up the market to new organisations, Agents will be delivering services in a competitive environment, promoting improved levels of service.

A smooth transition to the new arrangements

The nature of the workers compensation insurance market requires change to be introduced in controlled stages to avoid destablisation.

To help stabilise the market during the transition, a portion of claims and policies will be transferred from existing temporary Agents to the new Agents. Policies chosen by WorkCover to switch Agents will be randomly selected and will only be moved on renewal.

As workers compensation premiums are set by a formula established by law, these will not be affected by switching Agents.

The policies of employers who fall in to the following categories will not be switched to another Agent: Employers with a basic tariff premium of $200,000 or more; Strata policies, private households employing staff and residential strata schemes; Employers with national operations and insurance arrangements, who use one agent for all states and territories where they operate.

A temporary freeze on the movement of policies To further minimise disruption, there is a temporary freeze on the voluntary movement of policies on and from 2 July 2005 up to and including 29 June 2006.

When the freeze is lifted, employers can renew their workers compensation policy with an agent of their choice.

Employers required to short term or cancel and transfer their policy due to grouping requirements will be exempt market freeze. Employers can contact their agent for further information on grouping.

Vero workers compensation clients

In May 2005 Vero Insurance Limited announced its decision to leave the workers compensation market in NSW.

As a result, WorkCover NSW will be transferring all Vero workers compensation claims and policies to a new Scheme Agent, Cambridge Integrated Services.

Cambridge Integrated Services has won a contract to provide claims and policy services in the NSW Workers Compensation Scheme.

WorkCover NSW, Vero Insurance Limited and Cambridge Integrated Services are working together and aim to provide minimum disruption and continuity of service during the transition process.

Employers with current Vero policies that are due for renewal before or on 29 June 2006 will need to renew their policy with Cambridge Integrated Services.

If an employer’s policy is due for renewal after 29 June 2006, they may renew their policy with an Agent of their choice.

Benefits for all Changes to the workers compensation system aim to more closely address the needs of workers and employers and improve financial outcomes for the Scheme.

Need more information?

The new Scheme arrangements will commence from January 2006. Contact your agent or visit www.workcover.nsw.gov.au for more information.

Your Agents The seven successful organisations have won a contract to provide claims and policy services in the NSW workers compensation Scheme. The contracts are for an initial three years with a renewal option for up to a further three years, based on performance.

Find out more about Scheme Agents by visiting their websites: www.allianz.com.au www.cisv.com.au www.cgu.com.au www.emia.com.au www.gallagherbassett.com www.gio.com.au www.qbe.com.au