17 JULY

NEW ZEALAND GAZETTE

1777

Insurance (Employment Premium) Regulations, and the Reserves Policy.

Before making recommendations to the Minister on the making of regulations prescribing premium rates and gazetting of the Reserves Policy, ACC must consult with premium payers regarding:

• the average premium levels (i.e. funding level);
• the premium pricing policy and resulting individual premiums levels; and
• its proposed Reserves Policy.

ACC is proposing a decrease to the average employment premium rate:

• the current average rate is $2.61 per $100 of liable earnings (G.S.T. exclusive)
• the proposed average rate range is $1.67 to $1.95 per $100 of liable earnings (G.S.T. exclusive).

Under sections 128 and 167A of the Accident Rehabilitation and Compensation Insurance Act 1992, premium payers are invited to make written submissions on the proposed reserves policy and employment premium regulations.

A discussion paper is available by writing to ACC, P.O. Box 242, Wellington, or by contacting Joanne Allan on (04) 460 7367 or the ACC Premiums help-desk on 0800 222 776.

Submissions close on Friday 22 August 1997.

go4886

Consultation on Funding of the Motor Vehicle Account

ACC, acting on behalf of the Minister for Accident Rehabilitation and Compensation Insurance, is seeking the views of the motoring public and other interested parties on proposed changes to funding of the Motor Vehicle Account, including:

• a reduction in the current class 2 motor vehicle premium rate from $90 to $81 (95 percent of vehicles registered are class 2);
• proposed changes to the Corporation’s Reserves Policy; and
• funding of the Motor Vehicle Account.

ACC has produced a detailed discussion paper, and a shorter summary version, which reviews the current Motor Vehicle Account premium structure, and presents four ways to improve the current arrangements:

• the Exposure Option where premiums relate to exposure (distance travelled) and the size of car/fuel efficiency;
• the Vehicle Option where premiums are greater for owners of large cars and motor cycles, reflecting greater involvement in more severe injury/fatal accidents;
• the Driver Option where premiums are greater for younger drivers who are at higher risk of having an accident; and
• the Mixed Vehicle and Driver Option where premiums are greater for owners of large cars and motor cycles, reflecting greater involvement in more severe injury/fatal accidents; and greater for younger male vehicle owners who are at higher risk of having an accident.

Under sections 128 and 167B (2) of the Accident Rehabilitation and Compensation Insurance Act 1992, premium payers are invited to make written submissions on the proposed reserves policy and motor vehicle premium regulations.

A discussion paper is available by writing to ACC, P.O. Box 242, Wellington or by contacting Joanne Allan on (04) 460 7367 or the ACC Premiums help-desk on 0800 222 776.

The options presented in this paper are not government policy. The Corporation is consulting for discussion purposes only. Following consultation, the Corporation will present findings for government consideration.

Submissions on the premium rate and the reserves policy close on Friday, 22 August 1997.

Submissions on the proposed premium structures close on Friday, 28 November 1997.

go4887

Consultation on the Proposed Reserves Policy

ACC, acting on behalf of the Minister for Accident Rehabilitation and Compensation Insurance, is proposing to amend the Corporation’s Reserves Policy.

The Government has directed that the ACC scheme continues on a Pay-As-You-Go funding basis. The reviewed reserves policy which the Corporation proposes to recommend to the Minister for ARCI is:

Premiums shall be set with the intention of meeting the current cost of claims and administration-related expenses in the year in which the premiums apply (the “pay-as-you-go” cost), subject to adjustment relating to the level of reserves as described below.

The Scheme shall hold reserves to:

(a) Minimise the likelihood that short-term borrowing will be required as a result of:

(i) Unfavourable variations from forecast expenditure and/or income; or

(ii) The need for working capital; and

(b) Allow the progression of premium rates to be smoothed having regard to:

(i) Adjustments needed to restore reserves to the target level; and

(ii) Expected changes in the pay-as-you-go costs for future years.

The target level of reserves at the end of a premium year is the equivalent of 6 months of the subsequent years’ pay-as-you-go cost.

Premiums may be set at rates other than the pay-as-you-go cost, and reserves may be maintained at levels other than the target, under the following conditions:

(a) Reserves shall be restored to the target level over a reasonable period (generally not to exceed 5 years); and

(b) A negative reserve shall be eliminated as soon as practicable.

The reserves policy only applies to the Employers’, Earners’ and Motor Vehicle Accounts (and Medical Misadventure in the event of a separate premium for this Account being introduced in future).

Under sections 128 of the Accident Rehabilitation and Compensation Insurance Act 1992, members of the public are invited to make written submissions on the proposed reserves policy.

A discussion paper explaining the Reserves Policy is available by writing to ACC, P.O. Box 242, Wellington or