WorkCover Tasmania Board Policy
In recent times, a number of self-insurers have surrendered their Permit to Self-Insure to take up coverage in other jurisdictions or to purchase a policy from a licensed insurer. A number of these organisations have asked how they may retrieve their Bank Guarantee from the WorkCover Tasmania Board.
Consequently, the Board has developed a Policy for the Return of Financial Undertakings to help organisations that previously held a Permit to Self-Insure. This policy was approved by the Board at its meeting on 25 February 2014. This policy aims to ensure that former self-insurers' claim liabilities are met without the need for recourse to the Nominal Insurer, while reducing the on-going financial impact to insurers.
As stated in the policy, if certain conditions can be met, then the financial undertaking may be released. These conditions are:
- there are no open claims
- there has been no new claim reporting activity for seven years
- there is no identified latent claim exposure, and
- the actuarial valuation estimates zero claims liability.
Return of Financial Undertakings – Bank Guarantees
Self-insurers who return their permit remain responsible for the claims liabilities relating to the period for which they held a Permit granted by the Board.
Self-insurers must continue to comply with the Deed exchanged at the time the permit was granted. This is a legally binding document.
There are two options to consider when either requesting a reduction or return of a financial undertaking:
- Portfolio Transfer: If the self-insurer can obtain a portfolio transfer that is legally binding and that transfers the tail to a licensed insurer, a copy of the legal arrangements associated with the transfer must be provided to the Board when applying for the release of the financial undertaking. The agreement must clearly define the transfer of all liabilities for all existing and future liabilities associated with the period as a self-insurer.
- No portfolio transfer: Where the self-insurer wishes to continue to manage the claims themselves, the financial undertaking is to be calculated as 150% of the most recent actuarial central assessment of the outstanding claims liabilities. The one million minimum will not apply.
If a reduction is sought, the self-insurer must submit an actuarial assessment as above. The cost of obtaining this report is the former self-insurer’s responsibility. A financial undertaking may only be reviewed annually.
Where a former self-insurer requests a return of the financial undertaking, the actuarial report submitted with the written request must be prepared by an actuary who is a fellow of the Institute of Actuaries of Australia and must address specific criteria.
Former self-insurers wishing to seek a return of the Financial Undertaking should contact WorkCover, which will advise the specific requirements to be addressed in the Actuarial report.
To apply for the return of your organisation's financial undertaking, please forward a written statement and supporting documentation to:
The WorkCover Tasmania Board
PO Box 56
Rosny Park TAS 7018