As a self-insurer the NSW Government does not pay workers compensation premiums to a licensed insurer. They carry their own underwriting risk and outsource the claims administration to large Australian insurance companies.
icare tmf uses the terms Contribution, Benchmark and Hindsight because these represent the setting of Target Contribution, Deposit Contributions, Benchmark Funding and Hindsight Adjustments. These terms are used to reflect the unique arrangement of icare self insurance.
- Target Contributions represents the total cost to run the fund for a year.
- Deposit Contributions are each icare tmf agency’s annual payment toward the running of the fund.
- Benchmark Funding represents the funding of principal departments and grant agencies towards payment of their contribution to the icare tmf.
- Hindsight Adjustment is a method of rewarding effective management of claims and the minimisation of risks.
Actuaries calculate funding, contributions and hindsight amounts by considering:
- the actual cost of claims for a fund year
- agencies’ risk exposures
- claims costs for the previous two calendar years
- performance from comparable industries and other jurisdictions
- impacts to claims from legislative reforms and initiatives.