Licensing

Under the SRC Act, certain Commonwealth authorities and eligible corporations may apply for a licence to self-insure their workers’ compensation liabilities and manage compensation claims.

Comcare provides support to the Commission in its performance of its functions regarding licensing. Comcare evaluates licence applications, monitors a licensee’s performance against licence conditions and recommends actions and licence fees.

Two licence applications were received in the reporting period from the Australian National University and Ron Finemore Transport Services Pty Ltd. StarTrack Express Pty Ltd, Ron Finemore Transport Services Pty Ltd7 and Virgin Australia Airlines Pty Ltd joined the scheme in 2016–17 as self-insured licensees.

In 2016–17, licence extensions commenced for K & S Freighters Pty Ltd, National Australia Bank Ltd, National Wealth Management Services Ltd, John Holland Group Pty Ltd, John Holland Pty Ltd and John Holland Rail Pty Ltd. The Commission also considered and granted licence extension to a further five licensees which take effect in 2017–18.

The Commission also considered and approved licence variations for 34 licensees.

Table 26 summarises licence types, licensees and expiry dates at 30 June 2017.

The Commission settled licence fees for 2017–18 at its 13–14 June 2017 meeting.

Consultation with licensees

A meeting between the Commission and licensees was held on 8 March 2017. The meeting comprised an open discussion on elements of the Commission’s new regulatory model. The Commission also consulted during the reporting year with licensees on the development of the various elements of the Commission’s regulatory model and other matters affecting licensees. The Commission will continue to meet and work with the licensees collectively on current topics of interest.

Table 26: Licence types, licensees and expiry dates (at 30 June 2017)

Licence type Features Licensee (expiry date) Claims management arrangements

Corporation

Self-insurance self-claims management
(with capacity to arrange for a third party claims manager)

Asciano Services Pty Ltd (formerly known as Pacific National (ACT) Limited) (30/06/2025) In house with claims review performed by Australian Postal Corporation
Australian air Express Pty Ltd (30/06/2025) QBE Insurance (Australia) Limited
BWA Group Services Pty Ltd (30/06/2022) Commonwealth Bank of Australia
Bis Industries Ltd (30/06/2023) In house with claims review performed by QBE Insurance (Australia) Limited
Border Express Pty Ltd (30/06/2022) In house with claims review performed by CGU
Cleanaway Operations Pty Ltd (formerly Transpacific Industries Pty Ltd) (30/06/2022) CGU Self Insurance Services
Colonial Services Pty Ltd (30/06/2022) Commonwealth Bank of Australia
Commonwealth Bank of Australia (30/06/2022) In house
Commonwealth Insurance Limited (30/06/2022) Commonwealth Bank of Australia
Commonwealth Securities Limited (30/06/2022) Commonwealth Bank of Australia
CSL Limited (30/06/2023) QBE Insurance (Australia) Limited
DHL Supply Chain (Australia) Pty Ltd (30/06/2022) In house
Fleetmaster Services Pty Ltd (30/06/2023) In house with claims review performed by CGU Self Insurance Services
John Holland Group Pty Ltd (30/06/2024) In house
John Holland Pty Ltd (30/06/2024) John Holland Group Pty Ltd
John Holland Rail Pty Ltd (30/06/2024) John Holland Group Pty Ltd
K & S Freighters Pty Limited (30/06/2024) In house
Linfox Australia Pty Ltd (30/06/2023) In house
Linfox Armaguard Pty Ltd (30/06/2023) CGU Self Insurance Services
Medibank Private Limited (30/06/2023) CGU Self Insurance Services
National Australia Bank Ltd (30/06/2024) In house
National Wealth Management Services Limited (30/06/2024) National Australia Bank Ltd
Optus Administration Pty Limited (30/06/2023) QBE Insurance (Australia) Limited
Prosegur Australia (formerly trading as Chubb Security Services Limited (30/06/2025) In house with claims review performed by Moray & Agnew
StarTrack Express Pty Ltd (30/06/2022) Australian Postal Corporation
StarTrack Retail Pty Ltd (30/06/2022) Australian Postal Corporation
Telstra Corporation Limited (30/06/2022) In house
Thales (formerly known as ADI Limited) (30/06/2025) In house with claims review performed by QBE Insurance (Australia) Limited
TNT Australia Pty Ltd (30/06/2022) In house with claims review performed by QBE Insurance (Australia) Limited
Virgin Australia Airlines Pty Ltd (29/09/2024) QBE Insurance (Australia) Limited
Visionstream Pty Ltd (30/06/2023) CGU Self Insurance Services
Wilson Security (30/06/2023) QBE Insurance (Australia) Limited

Commonwealth Authority

Self-insurance
self-claims management

Australian Postal Corporation (30/06/2022) In house
Reserve Bank of Australia (30/06/2023) In house with claims review performed by Australian Postal Corporation

Licence conditions and performance standards of licence

The Commission expects licensees to continuously improve their prevention, rehabilitation and claims management performance outcomes, to comply with licence conditions and to meet performance standards of licence.

Conditions of licence require compliance with the SRC Act and any applicable laws and regulations regarding the health, safety and rehabilitation of employees. A licensee is required to meet financial, prudential and performance reporting requirements as part of the conditions of licence.

Performance standards of licences require licensees to develop and implement effective management systems for prevention, rehabilitation and claims management, and to work towards the attainment of outcome-based performance goals.

The licence compliance and performance model

The 2016–17 year saw the transition across to the Commission’s new Licence Compliance and Performance Model (LCPM). The LCPM provides the regulatory framework under which the Commission monitors and assesses licensee performance, and replaced the previous Licensee Improvement Program and Tier Model.

The LCPM examines licensees’ prudential performance, results of internal and external reviews in prevention, rehabilitation and claims management performance, and provides for regulatory action by the Commission where non-compliance or performance concerns are identified.

Under the LCPM, licensees are no longer classified by ‘tier’, and instead as a developing/transitioning licensee or an established licensee. Developing/transitioning licensees are new scheme participants in their first two years of licence. Following the initial two-year period, licensees are considered to be established in the scheme.

Developing/transitioning licensees work closely with Comcare to develop systems by participating in, and being subject to, reviews throughout the first two years of licence to ensure that a licensee can meet the conditions of licence and performance standards set by the Commission.

The Commission uses this initial period to closely monitor the performance of a new licensee as they transition into the scheme. The Commission may choose to lessen the extensive reviews in the developing/transitioning phase where a licensee can evidence strong, consistent results against compliance and performance requirements.

Established licensees are required to be compliant with the conditions of licence and continue to meet the performance standards set by the Commission. A targeted review may be conducted in years two and six of an eight-year licence should the Commission consider the performance of a licensee would warrant a more thorough review.

Notwithstanding the above, the Commission can, at any time, determine that due to issues with compliance, reporting or performance results, a regulatory response is required. The status of a licensee (that is, developing/transitioning or established) does not inhibit the Commission from taking action to address a compliance or performance issue.

A key feature of the LCPM is the quarterly monitoring of the Commission-defined performance standards and measures, including the Licensee Key Performance Indicators (LKPIs). The Commission sets performance targets against these LKPIs, which include the incidence of serious and accepted claims based on industry benchmarks, return to work performance, and timeliness of claims management and reconsideration decisions. Licensees are provided with the opportunity to provide input and information regarding their quarterly results for consideration. The Commission uses the LKPI results and any further information provided by licensees to determine whether any regulatory action is required.

The self-insurance licence and the LCPM also provide a framework for the prudential obligations required of licensees under the licence. This includes the provision of a liability report describing current and predicted outstanding workers’ compensation liabilities (this information is used to calculate the guarantee amount) and the provision of a guarantee plus a reinsurance retention policy, yearly accounts and financial statements. Some licensees are also subject, based on risk, to ongoing financial monitoring which comprises a regime of continuous monitoring through media and rating agencies and annual desktop reviews of licensees’ financial statements.

Each year licensees provide an annual Licensee Compliance and Performance Improvement (LCPI) report certified by licensee senior management. The LCPI report provides the Commission with an overview of key activities undertaken and outcomes achieved by a licensee during the previous year. The LPCI report also details a licensee’s objectives for the coming year, and is the primary tool for licensees to: report to the Commission on performance against the Commission’s performance standards and measures; provide annual certification as per the prudential conditions of licence; and to demonstrate continuous improvement.

Licensees’ performance

Table 27 provides summary details of each licensee’s claims activity during 2016–17. Table 28 provides summary details of licensee performance against the LKPIs during 2016–17.

Care should be exercised in comparing the claims activity 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
2015–16 2016–17 2015–16 2016–17 2015–16 2016–17 2015–16 2016–17 2015–16 2016–17
Asciano 2836 2686 104 91 100 63 np 16 np np
AaE 442 438 9 11 9 8 33 7 9 np
Australia Post 26,316 26,527 1306 1276 950 1014 502 355 190 156
Bankwest 3829 3827 23 32 18 20 11 8 0 np
BIS 948 887 23 27 16 17 17 15 12 15
Border Express 785 763 30 38 27 23 np 0 0 0
Cleanaway (formerly TPI) 4219 4320 163 158 136 119 39 69 33 36
Colonial Services 2624 2620 9 np 8 np np np np 0
CBA 21,067 21,847 137 142 100 103 72 76 27 26
CommInsure 378 368 np np n/a np 7 np np 0
CommSec 5849 5578 18 12 14 9 6 np np np
CSL 2008 2322 14 np np np 7 np np np
DHL 2402 2586 50 76 45 57 12 11 np np
Fleetmaster 284 273 11 6 10 np 0 0 0 0
John Holland Group 2128 2101 39 22 27 18 21 18 8 7
John Holland 668 346 58 34 48 33 40 44 17 13
John Holland Rail 306 249 23 18 21 17 14 8 np np
K & S Freighters 2686 3115 98 113 73 88 67 77 np np
Linfox Armaguard 1814 1749 85 57 74 36 78 57 30 13
Linfox Australia 5013 4997 158 108 89 41 110 84 68 45
Medibank Private 1448 1687 10 11 np 9 0 np np 0
NAB 24,664 24,486 128 103 80 58 48 56 17 40
National Wealth Management 2561 1916 13 8 8 np 8 7 np np
Optus 8761 8445 48 54 27 40 17 10 12 7
Prosegur (formerly Chubb) 739 775 44 49 36 32 17 8 14 7
RBA 1082 1132 np np np np 0 0 0 0
StarTrack Express** n/a 3520 n/a 179 n/a 154 n/a 9  n/a np
StarTrack Retail Pty Ltd 467 221 np np np np 0 np 0 0
Telstra 29,790 28,782 339 297 190 184 228 203 151 128
Thales 3547 3482 49 36 39 32 6 10 np np
TNT 3776 4005 336 308 299 284 70 40 28 32
Virgin Airlines Australia *** n/a 6291 n/a 160 n/a 123 n/a Np n/a np
Visionstream 1665 1271 21 15 13 9 12 Np np np
Wilson Security**** 2583 5213 17 71 7 47 np 26 0 np
ALL LICENSEES 167,726 178,825 3367 3534 2474 2669 1469 1238 658 567

np—not publishable as the number is between one and five.
* Licence was revoked 30 June 2016.
** Licensee joined the scheme 1 July 2016.
*** Licensee joined the scheme 20 September 2016.
**** Licensee joined the scheme 1 January 2016.

Table 28: Licensee performance against Licensee Key Performance Indicators

  Notifiable worker injury fatalities Incidence of claims with 1 week lost time per 1000 FTE employees Incidence of accepted claims1 per 1000 FTE employees Median incapacity weeks Percentage of claims determined within 20 calendar days (injury) and 60 calendar days (disease) Percentage of reconsiderations decided within 30 calendar days
2015–16 2016–17 2015–16 2016–17 2015–16 2016–17 2015–16 2016–17 2015–16 2016–17 2015–16 2016–17
ALL LICENSEES 6 5 6.7 6.8 14.8 14.9 4.4 4.6 87% 88% 92% 98%

Record-keeping and reporting requirements under the Safety, Rehabilitation and Compensation Directions 2002

Table 29 provides details of the record-keeping requirements outlined in the above Directions and is reported in accordance with section 23 of the Safety, Rehabilitation and Compensation Directions 2002 (SRC Directions).

Table 29: Record-keeping requirements under SRC Directions

Further information is available in the ‘Licensing’ section of this report.

7This measure captures those claims that are initially accepted in the reporting period.