In the last 12 months, the NSW workers compensation industry has experienced dramatic change. As we approach 30 June 2016, it should be relieving for businesses to know that for there are no changes for workers compensation WorkCover Industry Classification (WIC) rates. As 2016/17 rates for NSW Workers Compensation apply to all renewals that fall due at 4pm on 30th June 2016, businesses and brokers will now be receiving renewal notices for these policies without fear of rate driven increases.
For large employers, icare however announced changes to the Retro Paid Loss (RPL) model by introducing Loss Prevention & Recovery (LPR) scheme as the replacement. LPR is progressively moving closer to providing pricing similar to that of insurers in privately underwritten schemes. This is an important change for large business.
Key Highlights
Structural Shift: The transition from RPL to LPR signals a move toward a more market?driven benchmark, aligning lending costs more closely with real economic conditions.
No Rate Changes: The one?year LPR remains at 3.0%, and the five?year LPR stays at 3.5%.
Policy Continuity: Rates have now held steady for eight consecutive months, reflecting the central bank’s cautious stance amid global uncertainties.
Brokers and their customers will now be receiving renewal notices for these policies. Key updates applicable to the 2016/17 policy period:
- There is no change to WIC rates
- Performance discounts have been provided for hindsight adjustments
- CPI changed from 1.6% to 1.7%
- Mine Safety Levy has changed from 1.177% to 0.743%
- Transitional capping will continue to cap at a 30% increase and approval via ICare
It is progressively moving closer to providing pricing similar to that of insurers in privately underwritten schemes. This LPR method is an alternative method to the traditional conventional model of calculating premiums payable by large employers. This method of premium calculation provides the incentive to improve workplace safety and outcomes for injured workers by offering more immediate financial rewards for loss prevention and recovery at work. Under this method, the premiums payable by large employers more closely reflect their individual experience.
Future Information:
Source: icare
Title: 2016/17 Rates & Changes
Read Time: 2 minutes
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