New South Wales’ statutory insurance regulator has launched a consultation around a proposed cost-sharing mechanism for COVID-19 workers’ compensation claims.
The State Insurance Regulatory Authority (SIRA) is seeking feedback from NSW insurers and employers on the claim cost-sharing proposal, which was made possible via amendments to the Workers’ Compensation Act 1987 that commented in May 2020.
The amendments introduced a rebuttable presumption that workers in prescribed employment who contract COVID-19, contracted the virus in the course of their employment. That means if employers and insurers want to contest the claim or the assumption that the virus was contracted at work, they have to prove otherwise.
Regulators were also given new powers under the amendments to make provision in relation to the sharing of financial risk arising out of COVID-19 between all insurers.
In a workers’ compensation regulation bulletin, SIRA said: “There is a strong public interest case for all insurers and employers in NSW to contribute to the cost of COVID-19 workers compensation claims. The cost-sharing mechanism will enable COVID-19 claims costs to be redistributed across the workers compensation system.”
A COVID claims cost-sharing mechanism would prevent individual employers and insurers “bearing a disproportionate and inequitable amount of risk,” according to the regulator. SIRA anticipates that redistributed costs will be passed on through employer premium. It also said the mechanism would help to keep the workers’ compensation market in NSW as healthy and competitive as possible.
SIRA is welcoming feedback on the proposed cost-sharing mechanism until 5pm on Friday, December 18, 2020.