Terms of Reference for the Treasury Managed Fund review

The State Insurance Regulatory Authority (SIRA) is undertaking an integrated compliance audit and performance review of Treasury Managed Fund (TMF) Government agencies’ workers compensation claims.

In establishing this review, SIRA is exercising its authority and undertaking responsibilities under the Workers Compensation Act 1987, the Workplace Injury Management and Workers Compensation Act 1998 (together, the Workers Compensation Acts) and the State Insurance and Care Governance Act 2015.

The review commenced in August 2022 and will be conducted by authorised SIRA officers, supported by external providers.

Background

The TMF is a government self-insurance scheme, administered by the NSW Self Insurance Corporation (SICorp). SICorp delegates its functions in operating the TMF to Insurance and Care NSW (icare) and icare appoints claims managers to provide claims management services to its TMF portfolio.

The TMF provides workers compensation insurance for over 330,000 workers across approximately 200 Government agencies. In the 2020/21 financial year, this portion of the workers compensation scheme accounted for:

• approximately 16,000 new claims and
• $844 million in benefits.

Following SIRA’s review of the Nominal Insurer (NI) in 2019 and a 2020 investigation into the management of three workers compensation claims by Corrective Services NSW (a TMF agency), SIRA committed to conducting a broader review across the TMF agencies.

Objectives

The primary objective of the review is to assess whether workers compensation activities within the TMF agencies are being conducted in accordance with the Workers Compensation Acts, subordinate legislation and best practice expectations. These require the provision of prompt treatment and payments and effective, proactive management of injuries to assist injured workers return to work.

A further objective is to evaluate the interplay between TMF agencies, claims managers and SICorp/icare in the conduct and administration of workers compensation claims.

Scope

The review will involve an end-to-end review of around 1,000 claims, assessing compliance and conformance against audit criteria and claims management benchmarks. Data will be drawn from claims with a ‘date entered in insurer system’ in the financial years 2019 to 2022.

Claims will be selected for review from TMF agencies across Government clusters in accordance with a risk- and outcomes-based regulatory approach and with a focus on psychological injury, return to work and liability decisions.

Outcome

The review will highlight risks and trends across the TMF agencies and assist SIRA in determining whether:

• claims are being managed fairly, effectively and efficiently and with the objective of securing the health, safety and welfare of workers
• further guidance or services are necessary to support stakeholders operating within the TMF
• clearer accountabilities are required between stakeholders operating within the TMF.

The review will inform SIRA’s consideration of the need for alternative strategies and solutions to improve outcomes for injured workers across the public sector.

At the conclusion of the review, a draft report will be provided to the SIRA Chief Executive. Principal stakeholders will be given the opportunity to consider and respond to the draft report prior to it being finalised. A final report is expected by the end of June 2023 and will be published shortly thereafter.