SIRA review of the minor injury definition: terms of reference

Review of the minor injury definition against the objectives of the Motor Accidents Injuries Act 2017

Proposed Terms of reference

To be commissioned by Chief Executive State Insurance Regulatory Authority (SIRA) July 2019

Background

On 1 December 2017, the NSW Government introduced the Motor Accident Injuries Act 2017 (‘the Act’) which is a new scheme of compulsory third-party (CTP) insurance for people injured in motor accidents in New South Wales. The purpose of the new scheme is to:

• Focus on early and appropriate treatment to enhance recovery and returning to work or other activities (for those who are not working)
• Provide early and ongoing financial support
• Encourage the early resolution of claims as well as quick, cost effective and just resolution of disputes
• Continue to make CTP insurance compulsory for all motor vehicle owners in NSW and keep premiums for CTP policies affordable by preventing excessive insurer profits and limiting benefits for people with minor injuries; and
• Deter fraud in connection with compulsory third-party insurance.

The aim of the new scheme is to have more benefits go to those persons that are seriously injured and to provide insurance protection to all people injured on the road with access to benefits and support to help them recover quickly and return to work and health.

The Minister, the Hon Victor Dominello MP in his second reading speech for the Motor Accident Injuries Bill 2017, stated that the new scheme:

“…will give people injured in accidents fast access to statutory benefits in the form of weekly income support and medical treatment and care… injured people on our roads will receive better payments faster so that they can focus on rehabilitation and return to good health...”

The Minister also noted in his second reading speech that:

“Under the reforms, 57 per cent of a premium dollar will go to injured people, of which 65 per cent will be paid to those people with more serious injuries.”

For those more seriously injured, the CTP scheme provides reasonable and necessary benefits for treatment and care for life.

To ensure that appropriate benefits are provided to people who are more seriously injured, the new Act, Regulations and Guidelines define the types of injuries where an injured person is expected to recover well with treatment, and return to work or usual activities within a short time frame.

These are defined as a “minor injury” in the Act.

A “minor injury” is defined in the Act as:

A soft tissue injury; or

A minor psychological or psychiatric injury.

The assessment of whether an injury is a soft tissue injury or a minor psychological or psychiatric injury is based on medical evidence.

The Act provides that people with a “minor injury” can receive up to 26 weeks of income, treatment and care support. Additional treatment and care may be available if it will improve the person’s recovery, or in other limited circumstances.

The Minister committed to a review of the minor injury definition at the two-year anniversary of the scheme which is 1 December 2019.

Terms of reference

The focus of the Act is on the rehabilitation of people injured in motor accidents, helping them recover faster and receive the necessary support when they need it the most. As per the Minister’s second reading speech, the focus of the new scheme:

“… will be on rehabilitation of injured road users so they can return to good health sooner...”

The objective of this review is to assess whether the minor injury definition and its application is achieving the intended outcomes of the Act and, if required, recommend any changes to the Act, Regulation or Guidelines.

The review will consider analysis of:

• scheme data and reports commissioned by SIRA which provide insight into the customer experience, recovery and needs of injured people who have been identified as having a minor injury in the scheme from 1 December 2017 to 30 June 2019 – including a review the first 1,000 claims under the Act;
• specific data and information related to the experience of injured people in the scheme who have been assessed under the diagnosis-related estimate (DRE) method as a DRE II condition, including an analysis of disputes about minor injury decisions;
• consultation with customers and stakeholders on the current minor injury definition.

Governance

The review will include a period of public consultation. The opportunity to make submissions will be available through SIRA’s website. Following public consultation, a draft report will be prepared and once it is endorsed by the SIRA Chief Executive and SIRA Board, it will be presented to the Minister for Customer Service. The final report will be made publicly available on the SIRA website in due course.

The SIRA Board will be the Steering Committee for the review. The Steering Committee will be supported by a reference group of actuaries, medical, allied health, dispute resolution and other relevant experts. The reference group will provide expert insight on the submissions received and the analysis conducted by SIRA.

Actuarial and related analysis will be provided by the independent scheme actuary, Ernst and Young (EY) and independent peer review actuary Taylor Fry.

Timeframes

The review is expected to be completed by December 2019. The report is expected to be made publicly available in early 2020.