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WORKERS COMPENSATION LEGISLATION (AMENDMENT)
BILL 1991 (No. 2)
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
The objects of this Bill are:
(a) to transfer responsibility for medical referees and medical panels from the
WorkCover Authority to the Compensation Court; and
(b) to ensure that the total amount to be contributed to the WorkCover Authority
Fund by insurers and self-insurers each year is contributed despite any change
in the estimate of the relevant premium income on which contributions are
based; and
(c) to make a minor amendment relating to criminal proceedings for false workers
compensation claims; and
(d) to make miscellaneous changes to the legislation dealing with insolvent
insurers, including:
(i) provision for an interim distribution of surplus money held for the
payment of claims involving certain of those insolvent insurers; and
(ii) transfer of the administration of that legislation from the GIO to the
WorkCover Authority; and
(iii) validations to take account of developments in the liquidations
involving Bishopsgate Insurance Australia Limited and AGCI.
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides that the proposed Act is to commence on a proclaimed day or
days.
Clause 3 is a formal provision which gives effect to the Schedule of amendments to
the Compensation Court Act 1984.
Clause 4 is a formal provision which gives effect to the Schedule of amendments to
the Workers Compensation Act 1987.
Clause 6 enacts special provisions relating to insolvent insurers, including
provisions:
(a) authorising an interim distribution of surplus money as soon as the proposed
Act receives the Royal assent; and
(b) validating action taken with respect to any scheme of arrangement relating to
Bishopsgate Insurance Australia Limited; and
(c) validating the payment of management expenses to the GIO as part of the costs
of administration of the speed funds.
SCHEDULE 1--AMENDMENT OF COMPENSATION COURT ACT 1984
Schedule 1 provides for the appointment of medical referees (including a chief
medical officer) and the constitution of medical panels. The provisions are similar to the
existing provisions except that:
(a) the chief medical officer is to be an officer of the Compensation Court and not
an officer of the WorkCover Authority; and
(b) other medical referees are to be appointed by the Chief Judge; and
(c) medical panels will continue to be constituted by medical referees nominated
by the chief medical officer, but on behalf of the Court and not the WorkCover
Authority.
SCHEDULE 2--AMENDMENT OF WORKERS COMPENSATION ACT 1987
Medical referees and panels
Schedule 2 (l), (3)(5) and (9) make amendments as a consequence of the
amendments made by Schedule 1.
False compensation claims
Schedule 2 (2) removes the restriction in section 92B of the Act that provides that
the summary offence of making false workers compensation claims is not applicable if
the claim form is verified by statutory declaration.
Insurers' Guarantee Fund
Schedule 2 (6) and (7) make minor changes to the provisions relating to insolvent
insurers that are covered by the Insurers' Guarantee Fund.
Contributions to WorkCover Authority Fund
Schedule 2 (8) provides for the redetermination of contributions by insurers and
self-insurers to the WorkCover Authority Fund to ensure that the appropriate total
amount to be contributed to the Fund by insurers and self-insurers each year is
contributed despite any change in the estimate of the relevant premium income on which
the contributions are based Under the Act, contributions are based on a common
percentage of each insurer's premium income for the financial year concerned--the
Workers Compensation Legislation (Amendment) 1991 (No. 2)
percentage being determined prior to that financial year on the basis of the estimated
total amount of premium income that will be received by all insurers during the year
and on the basis of the total amount required to be contributed to the Fund to meet the
estimated amount of expenditure from the Fund The WorkCover Authority's original
estimate of premium income may need to be revised because of unexpected changes in
economic circumstances.
SCHEDULE 3--AMENDMENT OF BISHOPSGATE INSURANCE
AUSTRALIA LIMITED ACT 1983
The Act establishes a fund under the management of the GIO to meet the workers
compensation liabilities of the insolvent Bishopsgate Insurance Australia Limited ("the
Company"). The Act requires certain licensed insurers to pay contributions to the fund
to meet those liabilities. After dissolution of the Company the Act provides for
remaining entitlements to be paid out of the Insurers' Contribution Fund.
Transfer of administration
Schedule 3 (1) transfers the administration of the Act from the GIO to the
WorkCover Authority and provides (after the closure of the fund) for payment of
liabilities from the Insurers' Guarantee Fund instead of the Insurers' Contribution Fund.
Scheme of arrangement
Schedule 3 (3) and (4) make the necessary consequential changes to take account of
the changing of the Bishopsgate liquidation to a scheme of arrangement.
Distribution of surplus to contributors
The Act presently provides that if any surplus money remains in the fund once the
GIO has paid out or made provision for paying out money authorised or required to be
paid out by the Act, the GIO is to repay that money attributable to contributors to the
contributors (with any remaining amounts being paid to either the liquidator or the
Insurers' Contribution Fund).
Schedule 3 (7) amends the Act to enable the GIO to make an interim distribution of
the surplus to the contributors instead of the contributors having to wait until the money
has been dealt with as presently required. The interim distribution and the final
distribution are to be made on the basis that all surplus money is to be paid to the
insurance companies which contributed to the fund (after deduction of any amount
required to meet liabilities and contingencies m respect of future claims).
Schedule 3 (8) makes a consequential amendment to the regulation-making power.
Other changes
Schedule 3 (2) makes a similar minor change to the provisions relating to the fund as
is made by Schedule 2 (6).
Schedule 3 (5) and (6) provide that payments may continue to be made from the
fund before it is closed to satisfy existing judgments and awards (as well as other
claims) when Bishopsgate Insurance Australia Limited is dissolved. At present
payments under existing judgments and awards may only be made from the Insurers'
Contribution Fund.
CONTRACTORS INSURANCE COMPANY LIMITED ACT 1980
Transfer of administration
Schedule 4 (1) amends the Act to effect a similar transfer of administration as
proposed under Schedule 3 (1) in the case of Bishopsgate Insurance.
Direct payment of claims
Schedule 4 (2) amends the Act to allow GIO to pay workers compensation claims
directly to claimants of AGCI instead of through the liquidator. A similar procedure
applies in the case of the Bishopsgate liquidation.
Recoveries under indemnity given by Palmdale Insurance Limited to AGCI
Schedule 4 (4) facilitates the recovery of money from the liquidator of Palmdale
Insurance Limited, a company in liquidation that was associated with AGCI and gave
AGCI an indemnity in respect of certain of its liabilities (including its liabilities under
relevant workers compensation insurance policies).
Distribution of surplus
Schedule 4 (7)(9) amend the Act to enable an interim or final distribution of surplus
contributions to the original contributors to the insolvent insurer under the Act in the
same manner as is proposed under Schedule 3 for Bishopsgate Insurance.
Other changes
Schedule 4 (3) repeals a provision relating to recoveries from re-insurers of AGCI
which is of no further use.
Schedule 4 (5) and (6) provide that payments may continue to be made from the
fund before it is closed to satisfy existing awards (as well as other claims) when AGCI
is dissolved. At present payments under existing awards may only be made from the
Insurers' Contribution Fund.
SCHEDULES 57--AMENDMENT OF OTHER ACTS RELATING TO
INSOLVENT INSURERS
Schedules 57 amend Acts relating to other insolvent workers compensation insurers
(including Northumberland Insurance Company; Riverina Insurance Company; and
Standard Insurance Company) to effect a similar transfer of administration as proposed
under Schedule 3(1) in the case of Bishopsgate Insurance.