NEW ZEALAND GAZETTE

No. 202

Departmental Notices

Accident Rehabilitation and Compensation Insurance Corporation

Accident Rehabilitation and Compensation Insurance Act 1992

Changes to ACC Premiums

Acting on behalf of the Minister for Accident Rehabilitation and Compensation Insurance (ARCI), ACC completed consultation with premium payers on proposed changes to ARCI Regulations (Employment Premiums, Experience Rating and Earner Premium).

ACC has now considered submissions received and has recommended to the Minister for ARCI changes to be made to the regulations for the 1999/2000 premium year. ACC is required by law to advertise to premium payers regarding its recommendations to government.

Workers' Compensation (Employment Premium)

Average premium rate

ACC recommended that the average 1999/2000 composite employer premium be $1.93 per $100 of liable earnings. This is 18% lower than the current 1998/99 average premium of $2.35. The composite 1999/2000 premium recommendation comprises of the following components:

• an average “workers compensation insurance” full funded premium rate of $1.33 (GST exclusive) per $100 of liable earnings; and
• a “reserves surcharge” premium rate of $0.60 (GST exclusive) per $100 of liable earnings.

This reduction reflects the significant improvement in scheme performance and lower incidence rates for new claims.

Alterations to premium risk groups/premium classification units

ACC recommended that:

• premium risk group 590 is merged with premium risk group 610;

• the following premium classification unit is transferred from premium risk group 680 to premium risk group 681:

  93191 Professional Sports Playing (not elsewhere classified);

• the following premium classification units are transferred from premium risk group 682 to premium risk group 681:

  93182 Sports and Services to Sports - Skiing (Snow)
  93194 Sports and Services to Sports - Cricket
  93195 Sports and Services to Sports - Golf
  93196 Sports and Services to Sports - Horse riding
  93197 Sports and Services to Sports - Motor Cycling
  93198 Sports and Services to Sports - Motor Racing;

• the following premium classification units are transferred from premium risk group 682 to premium risk group 680:

  93183 Sports and Services to Sports - Soccer
  93184 Sports and Services to Sports - Softball, Baseball
  93185 Sports and Services to Sports - Squash
  93186 Sports and Services to Sports - Swimming
  93187 Sports and Services to Sports - Tennis
  93188 Sports and Services to Sports - Water Skiing
  93192 Sports and Services to Sports - Boating/Yachting
  93193 Sports and Services to Sports - Cycling
  93199 Sports and Services to Sports - Netball

Experience Rating

ACC recommended that the ARCI (Experience Rating) Regulations 1993 are amended so that:

• Small employers are entitled to any 1998/99 experience rating discounts using the new experience rating formula, but are not charged any resulting loadings; and

• Experience rating assessments and any subsequent reassessments cease as follows:

  — On 31 March 2000 unless an application for review has been received or the assessment is undergoing some form of review or appeal process; and
  — By 30 September 2000 for all assessments and reassessments.

Earner Premium

ACC also completed consultation with premium payers as required by Section 167b on the premium for earners. The ACC Board has recommended an increase in 1999/2000 earner premiums to the Minister for ARCI.

Cabinet has decided that the Earners' Account will move from a pay-as-you-go to a full funded reserving basis. As a consequence of this change in reserving the ACC Board is now required to recommend that for the 1999/2000 premium year the composite earner premium increase by 17% from the current 1998/99 level of $1.20 to $1.40 per $100 of liable earnings, GST inclusive.

The change to a full funded reserves policy now requires premiums to be assessed in two components:

• a full funded insurance premium for new claims from 1 April 1999; and
• a “reserves” surcharge that will fund the costs of existing claims at 31 March 1999.

The earner premium was increased last year from $0.70 to $1.20 in anticipation of the move to full funding. The key difference in the recommended earner premium for next year is the addition of the “reserves” surcharge portion to fund existing claims at 31 March 1999.

Earner Premium Rate

ACC recommendation increase the earner premium from its current level of $1.20 to $1.40 (GST inclusive) per $100 of liable earnings for the 1999/2000 premium year. This premium comprises a base premium amount of $1.21 and a reserves portion of $0.19. The revised earners premium of $1.40 will be effective from 1 April 1999.

For more information

Employers and other interested parties who made