Workers’ comp premiums jump 40%

DESPITE tightening access to common law claims and reducing the recommended workers’ compensation premium rate by 10 per cent, WA premium rates have still blown out.

In 1996-97 the 15 Government-approved insurers collected $374.289 million in premiums. In 1999-2000 premium income was $610.733 million, about a 40 per cent increase.

The jump is largely due to insurers reacting to the blow out in common law workers’ compensation claims in 1999.

Premium rates have been falling over the past two halves but groups such as the Chamber of Commerce and Industry do not think they are falling fast enough.

The WA Government tightened access to common law claims last year to try and stabilise workers’ compensation premiums.

This was a key recommendation of auditor general Des Pearson’s 1999 review of the workers’ compensation system.

Workers now have to prove they have a 16 per cent disability or a 9.6 per cent disability in the case of a back injury.

A worker with a disability of less than 30 per cent, but more than 16 per cent, has six months to decide if he or she plans to pursue common law or receive weekly compensation payments and free medical costs.

This year the Government commissioned a review of the Pearson Review this year that considered both the medical and insurance sides of workers’ compensation.

The Campbell Ansell-chaired insurance review recommended:

l Establishing an independent Accountable Regulatory Authority;

l Introducing approved insurer licensing agreements to provide greater accountability to expected standards of service required under the Workers’ Compensation Act;

l Keeping the workers’ compensation scheme underwritten by private insurers for another five years;

l Encouraging small to medium-sized employers to seek group insurance;

l Allowing smaller employers to seek self insurance through group self insurer mutual schemes; and

l Making brokers disclose any commissions or incentives they receive from insurance companies.

The John Knowles-chaired review of medical and associated costs’ made 18 recommendations that included strengthening the assessment of the relationship between the injury and the workplace.

The review also recommended allowing injured workers to attend the medical practitioner of his or her choice.

Other suggestions were to make payments of medical services conditional on provision of comprehensive and complete documentation, creating protocols to guide the treatment of injured workers and finding a process to identify and prosecute over-servicing by medical and allied health professionals.

Another finding was that medical practitioner involved in treatment be made responsible for the monitoring of the worker.

The Government formed two taskforces to find ways to implement that review.

Chamber of Commerce and Industry director of operations services Brendon McCarthy, who is involved with those taskforces, said where the recommendations could be implemented without legislative change, the taskforces would opt for that approach.

“Given the electoral cycle it would be realistic to expect there will be no legislative changes until the next government is in place,” Mr McCarthy said.

Until 1999, most employers had been happy with WA’s workers’ compensation system but the common law claims blow out has changed that view.

“The whole workers’ compensation system has a long way to go to deliver reasonable benefits at a reasonable price,” Mr McCarthy said.

“The benefits of premium stabilisation efforts are still patchy.

“I think the recommendations lag time will be long. The thing more critical is what claims experience is following the common law changes.”

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