The Licensee Improvement Program and the tier model

In 2015–16, the Licensee Improvement Program (LIP) was the regulatory framework under which the Commission monitored and assessed licensee performance.

The LIP examined licensees’ prudential performance, results of internal and external audits in prevention, rehabilitation and claims management and performance against Commission-defined indicators. At the end of March of each year, licensees provided an annual LIP report certified by senior management of the licensee. The LIP report identified material changes to the licensee’s prevention, rehabilitation and claims management systems, and provided a statement of management achievements against the licensee’s management objectives, targets for the year under review, and its goals for the coming year. The LIP report also documented and evaluated the licensee’s performance against the Commission’s performance measures. In addition, it summarised the outcomes of audits of the licensee’s prevention, rehabilitation and claims management functions and details of corrective actions. The report concluded with the licensee’s request for tier level in each of these functions for the coming year.

The outcomes of the LIP and the annual LIP report formed the basis for the Commission’s consideration of relevant licence extensions and calculation of the licence fees.

The Commission’s tier model was designed to allow the level, intensity and nature of regulatory oversight by the Commission to be determined, having regard to each licensee’s performance outcomes and relative maturity. The tier model comprised three levels, and each licensee was given a tier ranking for each of its prevention, rehabilitation and claims management functions. External audits were performed for those functions in the first tier, desktop audits for the second tier and licensee self-audits in the third tier. There were specific instances when external audits were required to be conducted, regardless of the tier level of a licensee or its performance. These included a new licensee in the first year of its licence, any licensee in the last year of its current licence, or where there was a change in the licensee’s claims management provider.

As part of the LIP, licensees were assessed against the Determining Authorities Key Performance Indicators (DAKPIs). The Commission set performance targets against a number of these DAKPIs, such as incidence and frequency of injury, timeliness of claims management decisions, and rehabilitation and return to work rates, including those which incorporated the National WHS Strategy targets (i.e. incidence of injuries resulting in five or more days’ compensation and incidence of fatalities caused by traumatic injury). Licensees were also subject to periodic data quality audits to verify the accuracy of base data used to calculate performance against the DAKPIs.

The LIP also reviewed the prudential obligations required of licensees under their licence. These include providing a liability report describing current and predicted outstanding workers’ compensation liability (this information is used to calculate the guarantee amount) and provision of the guarantee plus a reinsurance policy, yearly accounts and financial statements. The licensees are also subject to on-going financial monitoring, which comprises a regime of continuous monitoring through media and rating agencies and annual desktop reviews of licensees’ financial statements.

Licensee performance was assessed under the LIP for the last time. The Commission’s new regulatory framework, the Licence Compliance and Performance Model, takes effect from 1 July 2016.

Licensees’ performance

Table 3 provides summary details of each licensee’s claims activity during 2015–16. Tables 4 and 5 provide summary details of each licensee’s performance against the DAKPIs during 2015–16.

Care should be exercised in comparing the performance of licensees given the different risk profiles of individual employers.

Licensee data

Table 27: Licensees’ claims activity

Number of FTE employees Number of claims received Number of claims initially accepted Number of reconsideration requests decided Number of AAT
appeals received
2014–152015–162014–152015–162014–152015–162014–152015–162014–152015–16
Asciano 2 819 2 836 127 104 114 100 6 np 7 np
AaE 431 442 12 9 12 9 47 33 11 9
Australia Post 26 911 26 316 1 486 1 306 1 081 950 507 502 259 190
Avanteos 174 0 np n/a np 0 np 0 0 0
Bankwest* 1 965 3 829 16 23 13 18 np 11 0 0
BIS 1 143 948 45 23 36 16 18 17 11 12
Border Express 705 785 32 30 29 27 np np np 0
CFS Property** n/a n/a n/a n/a 0 0 np np 0 0
Cleanaway (formerly TPI) 4 145 4 219 197 163 151 136 63 39 38 33
Colonial Services 2 657 2 624 15 9 7 8 8 np 6 np
CBA 21 426 21 067 189 137 135 100 54 72 14 27
CommInsure 366 378 np np np 0 np 7 0 np
CommSec 5 698 5 849 26 18 19 14 10 6 np np
CSL 1 890 2 008 7 14 np np 6 7 np np
DHL*** 2 776 2 402 70 50 49 45 6 12 np np
Fleetmaster 254 284 16 11 16 10 np 0 np 0
John Holland Group 2 600 2 128 44 39 37 27 10 21 np 8
John Holland 1 679 668 154 58 143 48 36 40 14 17
John Holland Rail 290 306 16 23 16 21 13 14 np np
K&S Freighters 1 925 2 686 103 98 70 73 84 67 0 np
Linfox Armaguard 1 926 1 814 106 85 95 74 83 78 29 30
Linfox Australia 5 608 5 013 229 158 155 89 88 110 63 68
Medibank Health Solutions**** n/a 120 n/a n/a n/a 0 n/a 0 0 0
Medibank Private***** 873 1 448 8 10 np np np 0 0 np
NAB 23 979 24 664 141 128 77 80 39 48 27 17
National Wealth Management 2 590 2 561 11 13 np 8 np 8 np np
Optus 8 652 8 761 47 48 29 27 13 17 9 12
Prosegur (formerly Chubb) 793 739 59 44 48 36 35 17 19 14
RBA 1 024 1 082 np np np np 0 0 np 0
StarTrack Retail Pty Ltd 498 467 7 np np np np 0 np 0
Telstra 29 064 29 790 421 339 306 190 167 228 83 151
Thales 3 453 3 547 39 49 34 39 10 6 np np
TNT 3 889 3 776 419 336 394 299 64 70 8 28
Visionstream 1 825 1 665 30 21 23 13 29 12 6 np
Wilson Security****** n/a 2583 n/a 17 n/a 7 n/a np n/a 0
All licensees 164 106 167 726 4 080 3 367 3 113 2 474 1426 1469 634 658

np—not publishable as number is between one and five.
*Licensee joined the scheme 1 January 2015.
**Licence revoked 23 March 2014.
***Licensee joined the scheme 1 July 2014.
****Licensee joined the scheme 3 November 2014 and licence was revoked 30 June 2016.
*****Licensee joined the scheme 3 November 2014.
******Licensee joined the scheme 1 January 2016.

Table 28: Licensees’ performance against Determining Authority Key Performance Indicators

Notifiable worker injury fatalities Incidence of claims with one week lost time per
1000 FTE employees
Incidence of claims  per 1000 FTE employees
2014–152015–162014–152015–162014–152015–16
Asciano 0 0 9.9 13.8 40.4 35.3
AaE 0 0 16.2 15.8 27.8 20.4
Australia Post 2 1 15.3 14.6 40.2 36.1
Avanteos 0 0 5.7 n/a 11.5 n/a
Bankwest* 0 0 3.1 2.4 6.6 4.7
BIS 0 1 21.9 9.5 31.5 16.9
Border Express 0 1 24.1 10.2 41.1 34.4
CFS Property** 0 0 n/a n/a n/a n/a
Cleanaway (formerly TPI) 0 1 17.1 18.5 36.4 32.2
Colonial Services 0 0 0.4 1.1 2.6 3.0
CBA 0 0 2.5 2.4 6.3 4.7
CommInsure 0 0 5.5 0 5.5 0
CommSec 0 0 1.8 1.9 3.3 2.4
CSL 0 0 0.5 1.0 1.1 1.5
DHL*** 0 0 1.4 6.2 17.7 18.7
Fleetmaster 0 0 55.1 31.7 63.0 35.2
John Holland Group 0 0 5.0 4.2 14.2 12.7
John Holland 0 0 21.4 28.4 85.2 71.9
John Holland Rail 0 0 10.3 13.1 55.2 68.6
K&S Freighters 0 0 22.3 20.5 36.4 27.2
Linfox Armaguard 0 0 29.6 30.3 49.3 40.8
Linfox Australia 1 1 16.6 13.2 27.6 17.8
Medibank Health Solutions**** 0 0 0 0 0 0
Medibank Private***** 0 0 2.3 1.4 4.6 2.8
NAB 0 0 1.5 1.6 3.2 3.2
National Wealth Management 0 0 0.4 2.0 1.9 3.1
Optus 0 0 1.4 0.8 3.4 3.1
Prosegur (formerly Chubb) 0 0 11.3 16.2 60.5 48.7
RBA 0 0 2.0 1.8 4.9 1.8
StarTrack Retail Pty Ltd 0 0 8.0 2.1 8.0 4.3
Telstra 0 1 1.9 1.8 10.5 6.4
Thales 0 0 3.8 2.0 9.8 11.0
TNT 0 0 40.1 41.3 101.3 79.2
Visionstream 0 0 10.4 2.4 12.6 7.8
Wilson Security****** n/a 0 n/a 0 n/a 2.7
All licensees 3 6 7.4 6.7 19.0 14.8

*Licensee joined the scheme 1 January 2015.
**Licence revoked 23 March 2014.
***Licensee joined the scheme 1 July 2014.
****Licensee joined the scheme 3 November 2014 and licence was revoked 30 June 2016.
*****Licensee joined the scheme 3 November 2014.
******Licensee joined the scheme 1 January 2016.

Table 29: Licensees’ performance against Determining Authority Key Performance Indicators—Back at work

Percentage of claims determined within 20 calendar days (injury) and 60 calendar days (disease)

Percentage of reconsiderations decided within 30 calendar days

Median Incapacity

  2014–15 2015–16 2014–15 2015–16 2014–15 2015–16
Asciano 81% 83% 67% 100% 4.9 5.9
AaE 100% 100% 100% 100% 8.8 5.1
Australia Post 77% 83% 97% 89% 4.2 4.8
Avanteos 100% n/a n/a n/a 2.2 n/a
Bankwest* 86% 100% n/a 100% 4.3 5.6
BIS 67% 95% 94% 94% 5.7 8.9
Border Express 97% 84% 100% 100% 2.3 1.5
CFS Property** n/a n/a 100% 100% n/a n/a
Cleanaway (formerly TPI) 84% 90% 95% 90% 3.4 4.1
Colonial Services 100% 100% 100% 100% 18.5 1.2
CBA 98% 96% 100% 100% 4.8 4.6
CommInsure 100% 100% 100% 100% 0 7.3
CommSec 96% 100% 100% 100% 2.3 2.3
CSL 100% 100% 100% 100% 6.5 3
DHL*** 90% 82% 100% 100% 1.4 4.4
Fleetmaster 68% 91% 100% n/a 2.7 1.7
John Holland Group 78% 82% 86% 93% 8.7 33.7
John Holland 84% 73% 89% 96% 3.3 7.6
John Holland Rail 88% 86% 100% 100% 13.1 8.6
K&S Freighters 77% 84% 85% 95% 5.5 3.8
Linfox Armaguard 74% 95% 92% 95% 3.4 4
Linfox Australia 81% 96% 72% 100% 5.2 3.5
Medibank Health Solutions**** n/a n/a n/a n/a n/a n/a
Medibank Private***** 75% 88% 100% n/a 6 2.8
NAB 94% 86% 85% 90% 4.5 5.3
National Wealth Management 100% 86% 100% 100% 1.2 3.8
Optus 87% 96% 100% 94% 3.2 3.5
Prosegur (formerly Chubb) 93% 95% 100% 93% 3 1.8
RBA 83% 100% n/a n/a 2 2.3
StarTrack Retail Pty Ltd n/a 100% 100% n/a 5.2 6.8
Telstra 85% 96% 89% 89% 4.6 4.1
Thales 72% 83% 83% 100% 4.4 9.4
TNT 65% 86% 89% 91% 3.7 3.9
Visionstream 94% 89% 100% 100% 3.9 7.8
Wilson Security****** n/a 100% n/a 100% n/a n/a
All licensees 80% 87% 93% 92% 4.2 4.4

*Licensee joined the scheme 1 January 2015.**Licence revoked 23 March 2014.
***Licensee joined the scheme 1 July 2014.
****Licensee joined the scheme 3 November 2014 and licence was revoked 30 June 2016.
*****Licensee joined the scheme 3 November 2014.
******Licensee joined the scheme 1 January 2016.