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Government accepts review’s icare reforms

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The NSW Government says 35 recommendations from the McDougall Review into state insurer icare will be immediately accepted while those requiring legislation will be responded to in due course.

Treasurer Dominic Perrottet says significant changes have been introduced since the McDougall Review was established last year in response to criticism of icare’s performance and processes.

“We know there is still more work to be done and these recommendations will form the bedrock of a better and stronger worker’s compensation scheme,” he said.

Independent review Robert McDougall found icare had rushed “headlong” into a program of change without taking time to put in place proper procurement and probity rules, and execution of reforms had been “sloppy”.

“Those failures of process have produced manifold unhappy consequences,” he said.

“The new model for claims management did not deliver the benefits that the legislature had intended. Return to work rates dropped. Costs increased. Injured workers experienced very considerable difficulties in getting access to the benefits to which, by law, they were entitled.”

Recommendations relate to governance, culture and oversight, with icare to report in detail to the Treasurer on implementation, and to also report progress publicly at least annually.

Proposals include that the State Insurance Regulatory Authority (SIRA) and Treasury should stress test assumptions in icare’s Nominal Insurer fiscal 2021 business plan to verify their veracity.

The report finds the problems at icare did not reflect “malign or corrupt intent” and there’s no threat to the Nominal Insurer’s solvency, or reason to think it will cease to be financially viable as long as premiums are set appropriately.

icare Chairman John Robertson says the organisation accepts the findings and will implement the proposals.

“Work has already started on many of the recommendations including bringing different expertise onto the board and improving risk and governance practices,” he said.

“We will work closely with all stakeholders and welcome the opportunity to input into discussions about broader policy or legislative reform.”

The Government also announced action to speed remediation of underpayments to injured workers, with progress to date hampered by the complexity of recalculations.

Deloitte will lead a review providing expert advice on rectifying the historical Pre-Injury Average Weekly Earnings (PIAWE) underpayments and overpayments, following their work on the 7-Eleven wage claims program.

SIRA says it will act on McDougall report recommendations, and is also considering findings from the NSW Standing Committee on Law and Justice, which last week tabled its review into the workers’ compensation scheme.