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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Workers Compensation Amendment
(Terrorism Insurance Arrangements)
Bill 2002
Contents
Page
1 Name of Act 2
2 Commencement 2
3 Amendment of Workers Compensation Act 1987 No 70 2
Schedule 1 Amendment of Workers Compensation Act 1987 3
I certify that this PUBLIC BILL, which originated in the LEGISLATIVE ASSEMBLY,
has finally passed the LEGISLATIVE COUNCIL and the LEGISLATIVE ASSEMBLY of
NEW SOUTH WALES.
Clerk of the Legislative Assembly.
Legislative Assembly,
Sydney, , 2002
New South Wales
Workers Compensation Amendment
(Terrorism Insurance Arrangements)
Bill 2002
Act No , 2002
An Act to amend the Workers Compensation Act 1987 to provide for a New
South Wales workers compensation terrorism re-insurance scheme; and for
other purposes.
I have examined this Bill, and find it to correspond in all respects with the Bill
as finally passed by both Houses.
Chairman of Committees of the Legislative Assembly.
Workers Compensation Amendment (Terrorism Insurance Arrangements)
Clause 1 Bill 2002
The Legislature of New South Wales enacts:
1 Name of Act
This Act is the Workers Compensation Amendment (Terrorism
Insurance Arrangements) Act 2002.
2 Commencement
This Act commences on a day or days to be appointed by
proclamation.
3 Amendment of Workers Compensation Act 1987 No 70
The Workers Compensation Act 1987 is amended as set out in
Schedule 1.
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Workers Compensation Amendment (Terrorism Insurance Arrangements)
Bill 2002
Amendment of Workers Compensation Act 1987 Schedule 1
Schedule 1 Amendment of Workers Compensation
Act 1987
(Section 3)
Part 7 Insurance
Insert after Division 7:
Division 8 Terrorism Re-insurance Fund
239AA Definitions
In this Division:
act of terrorism--see section 239AB.
insurer includes a licensed insurer, a self-insurer and a
specialised insurer.
threshold amount--see section 239AC.
TRF means the Terrorism Re-insurance Fund (if any)
established under section 239AE.
239AB Meaning of "act of terrorism"
(1) An act of terrorism is an act that, having regard to the nature
of the act and the context in which the act was done, it is
reasonable to characterise as an act of terrorism.
(2) Any lawful activity or any industrial action cannot be
characterised as an act of terrorism for the purposes of this
Act. An act may be so characterised only if it:
(a) causes or threatens to cause death, personal injury or
damage to property, and
(b) is designed to influence a government or to intimidate
the public or a section of the public, and
(c) is carried out for the purpose of advancing a political,
religious, ideological, ethnic or similar cause.
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Bill 2002
Schedule 1 Amendment of Workers Compensation Act 1987
239AC Meaning and application of "threshold amount"
(1) The threshold amount is the amount of $1 million.
(2) The threshold amount applies to the total amount of claims
referred to in this Division in respect of an act of terrorism
specified in a declaration under section 239AD, and not to the
amount of claims in respect of that act that are made against
each individual insurer.
(3) The threshold amount is to be apportioned among the insurers
who have a liability in respect of a claim referred to in this
Division.
Note. See section 239AH (6) for the insurer's proportion of the
threshold amount.
239AD Minister may make declaration as to significant terrorism-
related liabilities
(1) The Minister may, by order published in the Gazette, declare
that an act of terrorism specified in the declaration has given
rise to significant terrorism-related liabilities.
(2) The Minister may not make such a declaration unless:
(a) an insurer has requested the Minister to do so, and
(b) the Minister is satisfied that:
(i) an act of terrorism occurred after 4pm on 30 June
2002 or at any time on any day after that date, and
(ii) the act of terrorism has given rise to liabilities
(whether liabilities of one or more self-insurers,
or liabilities under policies of insurance issued or
renewed by one or more insurers that are not self-
insurers, or both) for payment of amounts that, in
total, exceed the threshold amount.
239AE Terrorism Re-insurance Fund
(1) On the first occasion (if any) that a declaration is made under
section 239AD, there is to be established a fund to be known
as the "Terrorism Re-insurance Fund" (or TRF).
(2) The following are to be paid into the TRF:
(a) all contributions required under this Division or the
regulations to be paid by insurers,
(b) income from the investment of money in the TRF,
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Workers Compensation Amendment (Terrorism Insurance Arrangements)
Bill 2002
Amendment of Workers Compensation Act 1987 Schedule 1
(c) any amounts authorised by the regulations to be paid
into the TRF from the funds of the Authority,
(d) all money recovered by the Authority pursuant to
section 239AJ,
(e) any other amounts that may lawfully be paid into the
TRF.
(3) The following are to be paid out of the TRF:
(a) the costs of administration of the TRF,
(b) such other payments as may be authorised or required
by this Division or the regulations to be so paid.
(4) The TRF is, subject to this Act, under the direction, control
and management of the Authority.
(5) The Authority may invest and re-invest money in the TRF in
such investments as may be determined from time to time by
the Authority. Any such investment may at any time be
realised, hypothecated or otherwise dealt with or disposed of
in whole or in part by the Authority.
239AF Insurers to provide Authority with information
(1) If an insurer requests the Minister to make a declaration under
section 239AD, the Authority may from time to time, by
notice in writing to any insurer (specifying the act in respect
of which the declaration is sought), require the insurer to
provide the Authority with information in relation to that act
in accordance with this section.
(2) The information is to be provided, in writing, no later than
21 days after the notice is served on the insurer.
(3) The following information is to be provided:
(a) a statement as to whether the insurer has, as an insurer,
incurred any liability for payment as a result of the act
specified in the notice,
(b) if the insurer has incurred such a liability:
(i) details of any claims received by the insurer in
respect of the liability,
(ii) details of any amount paid in respect of those
claims,
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Workers Compensation Amendment (Terrorism Insurance Arrangements)
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Schedule 1 Amendment of Workers Compensation Act 1987
(iii) an estimate (calculated in accordance with the
method specified in the notice) of any further
amount that the insurer will be required to pay (in
respect of both claims already received by the
insurer and anticipated claims),
(iv) details of any contracts or arrangements for re-
insurance that are in force to the benefit of the
insurer in connection with any such liability,
(c) such other information as may be prescribed by the
regulations.
(4) If the insurer subsequently has reason to revise any
information provided under this section, the insurer is
required to furnish the Authority with the revised information
in accordance with the WorkCover Guidelines (which may
make provision with respect to the furnishing of that
information).
(5) An insurer who fails to comply with a requirement under this
section is guilty of an offence.
Maximum penalty: 100 penalty units.
239AG Contributions to Terrorism Re-insurance Fund
(1) On each occasion that a declaration is made under
section 239AD, the Authority is to determine, in accordance
with this section:
(a) the total amount to be paid to the TRF, and
(b) the amount to be contributed by each insurer.
(2) The total amount to be paid to the TRF is the amount that the
Authority estimates will be necessary to satisfy all claims
(both against self-insurers and under policies of insurance
issued or renewed by insurers that are not self-insurers) in
respect of the act of terrorism specified in the declaration, less
the greater of the following amounts:
(a) the total of the maximum amounts payable to insurers
under contracts or arrangements for re-insurance in
respect of liability for claims arising from the act of
terrorism,
(b) the threshold amount.
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Amendment of Workers Compensation Act 1987 Schedule 1
(3) The Authority is to determine the amount to be paid to the
TRF by an insurer in accordance with the following formula:
A
-- × C
-
B
where:
A is the amount of wages (within the meaning of the insurance
premiums order relating to the financial year in which the act
of terrorism occurred) by reference to which the insurer's
premium (or, if the insurer is a self-insurer, the insurer's
deemed premium income) for that financial year was
calculated.
B is the total amount of wages (as referred to in A above) of
all insurers.
C is the amount determined under subsection (1) (a).
(4) The Authority is to give each insurer written notice of the
amount determined under this section in respect of the insurer.
The notice must specify the date or dates (the date being (or,
if more than one date is specified, the first date being) a date
not less than 15 days after the notice is given) by which the
insurer must pay the amount or specified instalments of the
amount (or, if the notice requires payment of a lesser amount
in accordance with subsection (5), that lesser amount or
specified instalments of that lesser amount) to the Authority.
(5) The notice may (but need not) offset in accordance with
section 239AI the amount (if any) to be reimbursed to the
insurer under section 239AH and reduce the amount to be
paid by the insurer under this section accordingly.
(6) If the Authority considers it necessary to do so (because, for
example, of the discovery of additional liabilities of insurers
arising from the act of terrorism concerned or because the
amount estimated to be necessary to satisfy all claims was
insufficient to do so), the Authority may make further
determinations, in accordance with this section, in respect of
the same act of terrorism. Subsections (4) and (5) apply in
relation to any such further determination under subsection
(3) in the same way as they apply in relation to the original
determination under that subsection.
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Schedule 1 Amendment of Workers Compensation Act 1987
(7) If an amount is not paid in accordance with a notice under this
section (regardless of whether the insurer concerned is to
receive any reimbursement under section 239AH):
(a) the Authority may recover the amount (together with
interest at the prescribed rate) as a debt in a court of
competent jurisdiction, and
(b) the insurer concerned is guilty of an offence.
Maximum penalty: 100 penalty units.
239AH Partial reimbursement of insurers from Terrorism Re-
insurance Fund
(1) If a declaration has been made under section 239AD, an
insurer may apply to the Authority for reimbursement of part
of the amount paid by the insurer in respect of claims arising
from the act of terrorism specified in the declaration.
(2) The Authority may, in accordance with this section,
reimburse an insurer who makes an application under
subsection (1).
(3) Any such reimbursement is to be made out of the TRF.
(4) The Authority may reimburse an insurer only if it is satisfied
that:
(a) the insurer has made the payments specified in the
insurer's application for reimbursement, and
(b) the payments were made in respect of claims (whether
because the insurer is a self-insurer or under policies of
insurance issued or renewed by the insurer) arising
from the act of terrorism specified in the declaration
under section 239AD, and
(c) the amount to be reimbursed is no more than the total
amount paid by the insurer in respect of those claims
less the amount of the insurer's excess.
(5) The Authority may:
(a) make an interim calculation of an insurer's proportion
of the threshold amount, and
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Amendment of Workers Compensation Act 1987 Schedule 1
(b) make an interim reimbursement (or reimbursements) to
an insurer,
on the basis of initial information provided by the insurer to
the Authority under section 239AF, and may make further
calculations or reimbursements (or both) on the basis of any
further or revised information provided under that section.
(6) In this section:
insurer's excess means the greater of the following:
(a) the insurer's proportion of the threshold amount,
(b) the maximum amount that is payable to the insurer
under any contract or arrangement for re-insurance in
respect of its liability for claims arising from the act of
terrorism.
insurer's proportion of the threshold amount means the
amount calculated in accordance with the following formula:
X
-- × Z
-
Y
where:
X is the amount of the insurer's liability in respect of claims
arising from the act of terrorism.
Y is the total amount of liability of all insurers in respect of
those claims.
Z is the threshold amount.
239AI Authority may offset
(1) The Authority may apply all or part of the amount to be
reimbursed to an insurer under section 239AH so as to reduce
the amount of any money due from and unpaid by the insurer
under section 239AG (including money by way of interest
calculated on the amount originally demanded under that
section).
(2) The Authority is to make any necessary adjustments
consequent on the application of a reimbursement (or part of
a reimbursement) under this section and is to give the insurer
written notice of:
(a) the way in which the reimbursement (or part of the
reimbursement) has been applied, and
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Workers Compensation Amendment (Terrorism Insurance Arrangements)
Bill 2002
Schedule 1 Amendment of Workers Compensation Act 1987
(b) any adjustments that have been made, and
(c) the amount (if any) that remains due from the insurer
under section 239AG after the application of the
reimbursement (or part of the reimbursement).
239AJ Subrogation
(1) On reimbursing an insurer under section 239AH in relation to
a claim paid by the insurer, the Authority is subrogated, to the
extent of the amount of the reimbursement, to all the rights
and remedies of that insurer against any other person in
respect of recovery of the money paid by the insurer in
relation to the claim.
(2) A certificate given by the General Manager certifying that a
specified amount has been reimbursed, under section 239AH,
to a specified insurer in relation to specified payments made
by the insurer is evidence of the matter certified.
(3) The Authority may exercise the rights and remedies to which
the Authority is subrogated under this section in the name of
the Authority or in the name of the insurer concerned.
239AK Regulations
(1) The regulations may make provision for or with respect to the
TRF.
(2) In particular, the regulations may make provision for or with
respect to the following:
(a) requiring insurers to make contributions and further
contributions to the TRF,
(b) the manner and method of determining any such
contributions and further contributions,
(c) the payment, and proceedings for the recovery, of
contributions and further contributions to the TRF,
(d) the making of applications for reimbursement from the
TRF, including the information to be provided to the
Authority in connection with any such application,
(e) the circumstances and the manner in which
contributions of insurers, and other amounts standing to
the credit of the TRF, may be distributed to insurers
otherwise than by way of reimbursement under section
239AH.
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Amendment of Workers Compensation Act 1987 Schedule 1
(3) The regulations may exempt from the operation of all or any
of the provisions of this Division any specified insurer or class
of insurers in such circumstances (if any), and subject to such
conditions (if any), as may be specified in the regulations.
239AL Review
(1) The Minister is to conduct a review of this Division to
determine whether the policy objectives of the Division
remain valid and whether the provisions of the Division
remain appropriate for securing those objectives.
(2) The review is to be conducted as soon as possible after
30 June 2004, and a report on the outcome of the review is to
be tabled in each House of Parliament as soon as practicable
after the completion of the review.
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