The NSW State Insurance Regulatory Authority has found significant underinsurance and employer non-compliance issues in the icare workers’ compensation scheme.

The regulator says a review discovered more than $60 million of premiums were unpaid due to missing wage declarations, and about 75% of audited employers showed non-compliance that accounted for another $24.5 million of premiums.  

SIRA says the issues “threaten the financial sustainability and fairness of the scheme” and highlight weaknesses in the state insurer’s quality control, use of outdated wage estimates and ability to follow up with employers.  

The review found specialised insurers had stronger, more active compliance controls, resulting in reduced risk exposure.  

SIRA says it has taken co-ordinated action with icare since December, resulting in a reduction of more than 294,000 outstanding wage declarations, and more than $353 million in recovered premiums.  

It has sought improved compliance by creating a self-service portal that allows 90% of wage submissions to be processed immediately, as well as employer education campaigns and efforts to strengthen oversight of premium adjustments.

SIRA CEO Mandy Young says that by the third quarter of this financial year, the regulator will begin targeting employers with more than $250,000 of revenue that fail to submit accurate wage declarations.  

The NSW government is considering introducing financial penalties for those found to underinsure, and SIRA is calling for punishments to “go beyond simple back payment of avoided premiums, to include fines and potential prosecution for deliberate non-compliance”.  

Ms Young said: “The review’s findings underscore the need for stronger regulatory tools and clear consequences for non-compliance.

“Ensuring all employers contribute fairly is essential to maintaining the integrity of the scheme to ensure workers that are injured receive the care and support they need.”