Workers' Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 (Qld)

Queensland Subordinate Legislation 2004 No. 74 Workers’ Compensation and Rehabilitation Act 2003 WORKERS’ COMPENSATION AND REHABILITATION AMENDMENT REGULATION (No. 1) 2004 TABLE OF PROVISIONS Section Page 1 Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2 Commencement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 Regulation amended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Amendment of s 3 (Definitions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5 Omission of s 13 (Deemed premium—s 20). . . . . . . . . . . . . . . . . . . . . . . . . 3 6 Replacement of s 14 (Premium or deemed premium for appeals—Act, s 569(2)(a)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 14 Premium for appeals—Act, s 569(2)(a). . . . . . . . . . . . . . . . . . . . . . . 4 7 Replacement of s 20 (Annual levy—Act, s 81). . . . . . . . . . . . . . . . . . . . . . . 4 20 Annual levy—Act, s 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8 Insertion of new s 20A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 20A Provisional annual levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 9 Amendment of s 22 (Conditions of licence—Act, s 83) . . . . . . . . . . . . . . . . 6 10 Insertion of new s 23A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 23A Deemed premium for appeals—Act, s 569(2)(a). . . . . . . . . . . . . . . . 6 11 Insertion of new pt 4, div 3A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Division 3A—Estimated claims liability 75A Purpose of div 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 75B Definition for div 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 75C Approved actuary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 75D Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 75E Self-insurer to give Authority and approved actuary information . . . 8 75F Actuarial report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 75G Copy of actuarial report to Authority and self-insurer. . . . . . . . . . . . 9 75H Authority to advise self-insurer whether agreement . . . . . . . . . . . . . 9 75I Reference to Authority’s actuary if no agreement . . . . . . . . . . . . . . . 9 75J Agreement on estimated claims liability . . . . . . . . . . . . . . . . . . . . . . 10 75K Reference to arbiter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 75L Arbiter’s costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 12 Insertion of new pt 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 PART 10—TRANSITIONAL PROVISION FOR WORKERS’ COMPENSATION AND REHABILITATION AMENDMENT REGULATION (No. 1) 2004 121 Estimated claims liability for ss 20 and 23A . . . . . . . . . . . . . . . . . . . 11 122 Adjustment of annual levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

s1 3 s6 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 1 Short title This regulation may be cited as the Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 . 2 Commencement This regulation commences on 1 July 2004. 3 Regulation amended This regulation amends the Workers’ Compensation and RehabilitationRegulation 2003. 4 Amendment of s 3 (Definitions) Section 3— insert— ‘ “estimated claims liability” has the same meaning as in section 84(6) of the Act.’. 5 Omission of s 13 (Deemed premium—s 20) Section 13— omit. 6 Replacement of s 14 (Premium or deemed premium for appeals—Act, s 569(2)(a)) Section 14— omit, insert—

s7 4 s7 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 ‘14 Premium for appeals—Act, s 569(2)(a) ‘ (1) For section 569(2)(a) 1 of the Act, premium, for an employer for a period of insurance, is an amount calculated under the formula— P = - W- -- 1- -- 0- × -- 0- -- R- -- ‘ (2) In subsection (1)— “P” means premium. “R” means the rate for the employer’s industry or business specified in the notice under section 54 2 of the Act that applies to the period of insurance. “W” means— (a) the wages of the employer for the preceding period of insurance; or (b) if the employer has only been insured for part of a period of insurance—a reasonable estimate of the wages of the employer for the period of insurance.’. 7 Replacement of s 20 (Annual levy—Act, s 81) Section 20— omit, insert— ‘20 Annual levy—Act, s 81 ‘ (1) For section 81 of the Act, the amount of the levy payable by a self-insurer for each financial year or part of a financial year of a licence is an amount calculated under the formula— L = (ECL × R) + $10 000 ‘ (2) In subsection (1)— “ECL” means estimated claims liability calculated under part 4, division 3A stated in the most recent actuarial report agreed by the 1 Section 569 (Starting appeals) of the Act 2 Section 54 (Setting of premium) of the Act

s8 5 s8 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 Authority, or decided by the arbiter, under that division, before a date fixed by the Authority by industrial gazette notice. “L” means annual levy. “R” means the rate published in the industrial gazette notice under section 81 3 of the Act for the particular financial year.’. 8 Insertion of new s 20A After section 20— insert — ‘20A Provisional annual levy ‘ (1) If— (a) the Authority and the self-insurer have not agreed on the calculation of estimated claims liability under part 4, division 3A; and (b) the arbiter has not decided the estimated claims liability; the Authority may use the amount of the estimated claims liability assessed by the approved actuary to calculate a provisional annual levy for a financial year under section 20 to ensure the self-insurer’s compliance with section 81 of the Act. ‘ (2) If the Authority and the self-insurer agree to the amount of the estimated claims liability ( “agreed amount” ), the Authority must give the self-insurer an adjusted levy notice based on the agreed amount within 14 days after the Authority and the self-insurer agree to the amount of the estimated claims liability. ‘ (3) If the Authority and the self-insurer do not agree to the amount of the estimated claims liability and the amount decided by the arbiter (the “decided amount” ) is not the same as the amount of the estimated claims liability used to calculate the provisional annual levy, the Authority must give the self-insurer an adjusted levy notice based on the decided amount within 14 days after the Authority or the self-insurer receives the statement of the arbiter’s decision about the estimated claims liability. 3 Section 81 (Annual levy payable) of the Act

s 9 6 s 10 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 ‘ (4) If the amount of the adjusted levy is more than the provisional annual levy, the self-insurer must pay the Authority the difference between the amount of the provisional annual levy and the amount of the annual levy actually payable by the self-insurer . ‘ (5) If the amount of the adjusted levy is less than the provisional annual levy paid by the self-insurer, the Authority must pay the self-insurer the difference between the actual annual levy payable and the amount paid as the provisional annual levy .’. 9 Amendment of s 22 (Conditions of licence—Act, s 83) (1) Section 22(a), ‘so’ to ‘section 20’— omit. (2) Section 22(c)— omit, insert— ‘(c) the annual assessment of estimated claims liability under section 84(3) of the Act must be calculated in the way set out in part 4, division 3A.’. 10 Insertion of new s 23A After section 23— insert— ‘23A Deemed premium for appeals—Act, s 569(2)(a) ‘ (1) For section 569(2)(a) 4 of the Act, deemed premium, for a self-insurer for a financial year of the self-insurer’s licence, is an amount calculated under the formula— DP = ECL × R ‘ (2) In subsection (1)— “DP” means deemed premium. 4 Section 569 (Starting appeals) of the Act

s 11 7 s 11 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 “ECL” means estimated claims liability calculated under part 4, division 3A that was used to calculate the annual levy under section 20. “R” means the rate published in the industrial gazette notice under section 81 5 of the Act for the particular financial year.’. 11 Insertion of new pt 4, div 3A After section 75— insert— ‘Division 3A—Estimated claims liability ‘75A Purpose of div 3A ‘This division sets out how to calculate estimated claims liability. ‘75B Definition for div 3A ‘In this division— “approved actuary” means an actuary approved by the Authority under section 84(3) of the Act to assess the self-insurer’s estimated claims liability. ‘75C Approved actuary ‘The approved actuary must calculate the estimated claims liability. ‘75D Calculation ‘ (1) The calculation must— (a) be prepared under the actuarial standard; and (b) apply a central estimate of the liability; and (c) as far as practicable, be based on the self-insurer’s claims experience; and 5 Section 81 (Annual levy payable) of the Act

s 11 8 s 11 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 (d) apply the risk free rate of return; and (e) include claims administration expenses of 7% of the liability; and (f) not include a prudential margin. ‘ (2) The calculation must be based on data ( “self-insurer’s data” ) necessary to enable the actuary to calculate the self-insurer’s estimated claims liability and prepare and give to the Authority and the self-insurer an actuarial report on the calculation— (a) as at the last day of the financial quarter immediately before the anniversary of the self-insurer’s licence renewal day; or (b) as at another day fixed by the Authority. ‘75E Self-insurer to give Authority and approved actuary information ‘The self-insurer must give the Authority and the approved actuary, in the form approved by the Authority, the self-insurer’s data necessary to enable the actuary to calculate the self-insurer’s estimated claims liability and prepare and give to the Authority an actuarial report on the calculation. ‘75F Actuarial report ‘ (1) After completing the calculation, the approved actuary must prepare an actuarial report on the calculation the actuary made. ‘ (2) The report must— (a) be prepared under the actuarial standard; and (b) clearly state the key assumptions made for the calculation and how the assumptions have been derived, including— (i) the average amount of claims for compensation against the self-insurer; and (ii) the average amount of claims for damages against the self-insurer; and (iii) claims anticipated to have been incurred by the self-insurer for which no formal claim has been lodged; and (iv) the frequency of claims for compensation against the self-insurer; and

s 11 9 s 11 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 (v) the frequency of claims for damages against the self-insurer; and (vi) the net amount of the claims after allowing for future inflation ( “inflated value” ); and (vii) the net present value of the inflated value after allowing for income from assets set aside by the self-insurer to pay the liability; and (viii)the rate of inflation used; and (c) state the following about the data used in the calculation— (i) the nature of the data; (ii) the approved actuary’s assessment of its accuracy; (iii) how the approved actuary interpreted the data; and (d) state the actuarial model used in the calculation; and (e) state the results of the calculation; and (f) state the approved actuary’s confidence in the results of the calculation; and (g) state the estimated claims liability. ‘75G Copy of actuarial report to Authority and self-insurer ‘The approved actuary must give a copy of the actuarial report to the Authority and the self-insurer by the day fixed by the Authority for the purpose or a later day agreed between the Authority and the actuary. ‘75H Authority to advise self-insurer whether agreement ‘Within 35 days after the approved actuary gives the Authority a copy of the actuarial report, the Authority must advise the self-insurer whether the Authority agrees or does not agree with the approved actuary’s assessment of the estimated claims liability. ‘75I Reference to Authority’s actuary if no agreement ‘ (1) After receiving a copy of the approved actuary’s report, the Authority may ask an actuary ( “Authority's actuary” ) to calculate the

s 12 10 s 12 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 amount of the self-insurer’s estimated claims liability and give the Authority an actuarial report on the calculation the actuary made in accordance with section 75F. ‘ (2) The Authority must give the Authority’s actuary the approved actuary’s report and the self-insurer’s data. ‘75J Agreement on estimated claims liability ‘If, at any time, the Authority and the self-insurer agree on the calculation of estimated claims liability having regard to the approved actuary’s actuarial report or any Authority’s actuary’s actuarial report the estimated claims liability is the amount agreed to by the Authority and the self-insurer. ‘75K Reference to arbiter ‘ (1) If the Authority and the self-insurer can not agree on the calculation, the Authority must refer the approved actuary’s report, the self-insurer’s data and any Authority’s actuary’s actuarial report to the arbiter for decision. ‘ (2) The Authority must make the referral within 14 days after the day the Authority advises the self-insurer that the Authority does not agree with the self-insurer’s approved actuary’s actuarial report under section 75H. ‘75L Arbiter’s costs The arbiter’s costs in deciding on the calculation are to be paid by the Authority and the self-insurer in equal amounts.’. 12 Insertion of new pt 10 After section 120— insert— ‘PART 10—TRANSITIONAL PROVISION FOR WORKERS’ COMPENSATION AND REHABILITATION AMENDMENT REGULATION (No. 1) 2004

s 12 11 s 12 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 ‘121 Estimated claims liability for ss 20 and 23A ‘ (1) This section applies for the calculation of the following for the financial year or part of the financial year starting on 1 July 2004— (a) annual levy under section 20; (b) deemed premium under section 23A. ‘ (2) The estimated claims liability to be used in the calculations is the estimated claims liability assessed under section 84(3) of the Act before 1 February 2004.’. ‘122 Adjustment of annual levy ‘ (1) This section applies for the calculation of an adjusted annual levy for a self-insurer who holds a self-insurer licence for the financial year or part of the financial year ending on 30 June 2004. ‘ (2) If the amount of the deemed premium is more than the estimated deemed premium for the financial year or part of the financial year, the self-insurer must pay to the Authority the difference between the amounts calculated under the formula— AAL = R × ( D – EDP ) ‘ (3) If the amount of the deemed premium is less than the estimated deemed premium for the financial year or part of the financial year, the Authority must pay to the self-insurer the difference between the amounts calculated under the formula— AAL = R × ( EDP – D ) ‘ (4) In this section— “AAL” means adjusted annual levy. “D” means the deemed premium for the self-insurer for the financial year or the part of the financial year starting on 1 July 2003, calculated under section 13 as in force immediately before 1 July 2004. “EDP” means the estimated deemed premium for the self-insurer for the end of the financial year starting on 1 July 2003, calculated under section 13 as in force immediately before 1 July 2004.

s 12 12 s 12 Workers’ Compensation and Rehabilitation Amendment Regulation (No. 1) 2004 No. 74, 2004 “R” means the rate published in the industrial gazette notice under section 81 6 of the Act for the particular financial year.’. ENDNOTES 1. Made by the Governor in Council on 10 June 2004. 2. Notified in the gazette on 18 June 2004. 3. Laid before the Legislative Assembly on . . . 4. The administering agency is the Department of Industrial Relations. © State of Queensland 2004 6 Section 81 (Annual levy payable) of the Act