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WORKERS COMPENSATION (ACTS OF TERRORISM) AMENDMENT BILL 2002
THE LEGISLATIVE ASSEMBLY
FOR THE
AUSTRALIAN CAPITAL TERRITORY
Workers Compensation (Acts of Terrorism) Amendment Bill
2002
EXPLANATORY MEMORANDUM
Circulated by authority of the
Minister for
Industrial Relations
Overview
This Act commences on 1 July 2002. The specific
purpose of the amendment Bill is to provide a solution to the reaction by the
world reinsurance market to the events of September
2001.
Following 11 September 2001, the worlds
reinsurers arrived at the decision not to provide reinsurance cover with respect
to acts of terror effective from 1 January
2002.
The amendments contained in the Bill are
of a temporary nature. They are intended to last for a period of 2
years.
Any act of terrorism within the next 2
years will be subject to a scheme. That scheme requires a pool arrangement to
be brought into effect by three triggers which are spelt out in the legislation.
The approved insurers in the pool are then
required to repay the fund manager by contributing to the pool over a period
determined by the fund manager. The total amount to be contributed by each of
the approved insurers will be determined by the proportion of the market that
each insurer holds.
Consequential
Amendments
Part 3 and Part 4 of the Bill deal with
consequential amendments of the legislation made necessary by the introduction
of the funding arrangements. The legislation contained in Chapter 14A will
terminate on 1 October 2004.
Schedule
1 Additional Amendments
Consequent on the passing of the Workers
Compensation (Amendment) Act 2001 it has been considered as necessary to
make additional amendments to a number of pieces of legislation affected by the
passing of the Act.
A number of amendments to
the Workers Compensation (Amendment) Act 2001 where made during the
debate on the Bill and have created some minor unintentional conflicts or errors
within the legislation as passed.
The vast
majority of amendments in Schedule 1 involve the omission of one word or
phrase and the substitution of another word or phrase to ensure a consistency of
meaning throughout the amended Act.
Part
2 Workers Compensation
Act
1951
Chapter 14A Temporary provisions
for
acts of
terrorism
30A Application
of Chapter 14A to insurers
This section defines the provisions that will act as
the triggers that will crystallise the formation and subsequent commencement of
the pool to be established under the
legislation.
The subsections of section 30A
provides as follows:
30A
(1) (a)
This subsection states that an approved insurer must
do all that they can to ensure that if it is possible and economically efficient
to do so then they should purchase reinsurance for acts of terror. However,
insurers are not required to purchase reinsurance if the cost of that
reinsurance would create an unnecessary economic burden on ACT
businesses.
30A
(1) (b)
This subsection states that for this Chapter of the
Act to apply the act of terror must fall within the definition provided in the
Act and have occurred prior to 1 April 2004.
30A
(1) (c)
This subsection states that the insurer must have
accepted the liability for the claims that have arisen as a result of the act of
terror.
30A
(1) (d)
This subsection requires the insurer to do all that
is reasonable to demand from their reinsurer all amounts possible from their
pre-existing insurance contracts.
30A
(1) (e)
This subsection requires that before this chapter
can be applied the insurer must have already paid out on accepted claims to
injured workers an amount at least equal to the threshold amount as defined in
subsection 30A (2).
30A
(2)
This subsection when read with subsection 30A (3)
prescribes the formula by which the temporary fund threshold amount for each
insurer is calculated.
30A
(3)
This subsection details the method to calculate the
market share of each insurer within the ACT Workers Compensation scheme and how
the size of the premium pool is to be determined. These amounts are then used
in the formula described in sub section 30A (2).
30B Definitions
for Chapter 14A
This section provides the definitions of a number of
terms used within the new Chapter 14 A.
30C Meaning
of act of terrorism for Chapter 14A
This section provides the definition of an act of
terrorism. This definition is essentially drawn from the United Kingdom
definition to be found in Part 1 Section 1 of the Terrorism Act 2000
(UK).
30D Terrorism
cover temporary reinsurance fund
This section sets out the sources and types of
funding that the fund manager may have regard to when establishing the temporary
reinsurance fund.
30D
(1)
This subsection determines when the fund is to be
established.
30D
(2)
This subsection sets out the sources of funding
which can be drawn upon to constitute the fund.
30D
(3)
This subsection provides for the management of the fund
by the Territory and ensures that monies received for the fund are managed under
the provisions of the Financial Management Act 1996.
30E Entitlement
of insurers to reimbursement from temporary fund
This section deals with an insurer’s right to
reimbursement with respect to uncovered liability. The entitlement will not
accrue until after an insurer has made attempts to recover from any existing
reinsurance contracts. They must also have paid out, in accepted claims, the
fund threshold amount that applies to the insurer.
30E
(1)
This subsection requires an insurer who has accepted
liability for claims that have arisen due to an act of terror to payout the fund
threshold amount. After having paid out the fund threshold amount, the insurer
is then entitled to be reimbursed by the temporary fund for the remaining
uninsured liability.
30E
(2)
This subsection states that where there is a
subsequent act of terror within 12 months of the first act of terror for which
the insurer has paid the fund threshold amount, the insurer is entitled to claim
for the full amount of the uninsured liability which arises from subsequent acts
of terror from the temporary fund.
30E
(3)
This subsection states that subsection 30E (2) only
applies if the insurer has done all that they can to ensure that if it is
possible and economically efficient to do so to have secured reinsurance for
terrorist acts. Secondly, that they have done all that is reasonable to demand
from existing reinsurance contracts the maximum amount that they
recover.
30E
(4)
This subsection defines the term uncovered
liability referred to in subsection 30E (1).
30F Payments
out of temporary fund
This subsection details how the temporary fund may
be used to pay or repay any amounts or interest due and owing under this
chapter.
30G Regulations
about temporary fund
This section provides for the regulation which may
be made under this amending Bill.
30H Exclusion
of Corporations Act
This section excludes the effects of the provisions
of the Corporations Act (Cwth) in respect of the temporary
fund.
30I Expiry
of Chapter 14A
This section provides for the date of expiration of
the legislation. The Chapter 14A will expire on 1 October
2004.
Part
3 Workers’ Compensation
Supplementation Fund Act
1980
Clauses
5, 6 & 7 provide for the amendment where necessary of the Workers’
Compensation Supplementation Fund Act 1980.
Part
4 Additional amendments
Schedule 1 of the amending Bill amends the Acts
detailed in that schedule.
Schedule
1 Additional amendments
Parts 1.1 to 1.5 deal with legislation, which has
been affected by the introduction of the Workers Compensation Amendment Act
2001. The matters requiring attention will be picked up in subsequent
legislation.
Parts 1.1 to 1.5 disconnect the
relationship between the Acts cited and the Workers Compensation Act
1951. A new arrangement for these issues will be addressed in regulations
made under the Workers Compensation Act 1951.
Part
1.6 Workers Compensation Act
1951
Part
1.6 deals with a number of sections which following the introduction of the
Workers Compensation Amendment Act 2001, it has been noted that words or
phrases have needed to be changed or otherwise dealt with, in order to make
clear the intention of the legislation and to ensure consistency of terminology.
[1.8]
This
amends one of the examples in the Act which was incorrectly worded. It is an
example which was intended to demonstrate the opposite meaning to another
example within the section. The amendment changes the word irregular to
regular.
[1.9]
This
section is amended to include a further subsection which was unintentionally
deleted in the drafting process. The subsection allows for the addition and
subtraction of conditions to which the test of substantial contribution must
apply before they can be compensated under the
scheme.
[1.10]
This
subsection is amended to update the medical terminology used within the Act and
is provided to ensure consistency of terminology throughout the
Act.
[1.11]
This
subsection is amended to update the medical terminology used within the Act and
is provided to ensure consistency of terminology throughout the
Act.
[1.12]
This
subsection is amended to update the medical terminology used within the Act and
is provided to ensure consistency of terminology throughout the
Act.
[1.13]
This subsection is amended to take into
consideration different statutory interpretation of may and must
as a result of the introduction of the Legislation Act
2001.
[1.14]
This
subsection is amended to update the medical terminology used within the Act and
is provided to ensure consistency of terminology throughout the
Act.
[1.15]
This
amendment updates the heading of the section to better reflect the meaning of
the
section.
[1.16]
This
amendment clarifies who the parities to an action are and who may commence
proceedings before the
court.
[1.17]
This
amendment clarifies who is responsible for rejecting a claim for compensation
and who must be informed when a claim has been
rejected.
[1.18]
The
subsection is amended to correct an incorrect use of a specific legal term. The
act had incorrectly required evidence to be provided in the form of an affidavit
when it should have been in the form of a statutory declaration.
[1.19]
The
subsection is amended by the addition of a note to explain the correct legal
term used as a result of the amendment at
[1.18].
[1.20]
This
amendment inserts a new subsection 12G(4) the purpose of the amendment is to
ensure that the liability of self insurers is not affected by subsection
12G(3).
[1.21]
This
subsection is amended to ensure that the Act provides sufficient regulatory
powers to ensure that the approval of rehabilitation providers allowed for in
the Act can be made under the
regulations.
[1.22]
This
subsection is amended to correct a grammatical error, the word incomes
was used when it should have been income in section
18H(4)(a).
[1.23]
This
amendment changes the title of the chapter to more accurately reflect the
content of the
chapter.
[1.24]
This
section is amended to allow for the regulations to prescribe that matters can be
settled by either conciliation or arbitration rather than solely by
arbitration.
[1.25]
This
amendment changes the title of the chapter to more accurately reflect the
content of the
chapter.
[1.26]
This
subsection is amended to correct a grammatical error, the word incomes
was used when it should have been income in section
27D(3)(a).
[1.27]
This
subsection is amended to update the medical terminology used within the Act and
is provided to ensure consistency of terminology throughout the
Act.
[1.28]
This
subsection is amended to ensure that there is an effective model of progressive
penalties to aid compliance with the
Act.
[1.29]
This
amendment inserts into the dictionary a definition of the word given
specifically as it relates to section
12(2).
[1.30]
The
dictionary is amended to ensure that the reference in the dictionary is properly
connected with the appropriate section in the
Act.
[1.31]
The
dictionary is amended to ensure that the reference in the dictionary is properly
connected with the appropriate section in the Act.
Part
1.7 Workers’ Compensation
Supplementation Fund Act
1980
Part
1.7 deals with amendments to the Workers’ Compensation Supplementation
Fund Act 1980. The amendments bring this legislation into line with the
amended Workers Compensation Act 1951. The provisions essentially deal
with terminology and updating of specific
provisions.
Section [1.33] removes the
apostrophe after the word workers, sections [1.34] to [1.40] update and
modernise the terminology used in the Workers’ Compensation
Supplementation Fund Act to ensure consistency with the Workers
Compensation Act 1951 after the passing of the Workers Compensation
(Amendment) Act 2001.
Part
2 Workers Compensation
Supplementation
Fund
[1.41] [1.42]
[1.43]
The sections update the name of the
Workers Compensation Supplementation Act 1980 sans apostrophe.
Division
4.1 Surcharge on Compulsory
insurance
policies
[1.44] [1.45]
These sections are amended to introduce the
term compulsory insurance which has replaced the term employer
policy in the Workers Compensation Act
1951.
[1.46]
This
amendment omits a redundant
clause.
[1.47]
This
amendment modernises the existing section to provided increased clarity in
relation to the meaning of the section. The rewording makes clear that the
Minister may determine the rate of the surcharge to be less than 10% but must do
so by notifiable instrument.
[1.48]
Omits
subsections made redundant by the new section at
[1.47]
[1.49]
This amendment allows for the renumbering of
the Act when it is next republished.
[1.50]
This amendment corrects an incorrect reference to
the Workers Compensation Act 1951.
[1.51] [1.52] [1.53] [1.54] [1.55] [1.56]
[1.57] [1.58] [1.59]
The amendments under these
sections update and modernise the terminology used in the Workers
Compensation Supplementation Fund Act 1980 to ensure consistency with
the Workers Compensation Act 1951 after the passing of the Workers
Compensation (Amendment) Act 2001.
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