NSW SELF INSURANCE CORPORATION · NSW Self Insurance Corporation - Annual Report 2007-08 8 About...

SICorpnsw

Annual Report2007-08

NSW SELF INSURANCECORPORATION

SICorpnsw

31st October, 2008

The Hon. Eric Roozendaal, MLC TreasurerGovernor Macquarie Tower1 Farrer Place Sydney NSW 2000

Dear Treasurer,

I am pleased to submit the Annual Report of the NSW Self Insurance Corporation (SICorp) for the financial year ended 30 June 2008, for presentation the Parliament of New South Wales in accordance with the Annual Reports (Statutory Bodies) Act 1985, Section 11.

Yours Sincerely

Steve HuntDirectorNSW Self Insurance Corporation

John PierceSecretaryNSW Treasury

NSW Self Insurance Corporation - Annual Report 2007-08�

CONTENTS

Section 1 - Strategic ManagementCharter 7 Values 7Services 7Strategic Objectives 7About SICorp 8Message from the Director 8 TMF Membership 8 SICorp Branch 8 Agency Advisory Board & Service Level Agreement Groups 9 Risk Management 9TMF Structure 10SICorp Management Team 12

Executive Performance 12SICorp Organisational Structure 13TMF Membership 14Premium Setting 14Premium Performance Indicators 15 Workers Compensation Risk Premium Rates by Claims Manager 15Services Delivered 16Contract of Coverage 17Guarantee of Service & Consumer Response 18SICorp Commitment to Stakeholders 18SICorp Stakeholder Matrix 19

Section 2 - The Year in ReviewChallenges 20Strategies 20IAB Recommendation & Implementation 20Improvements to Communications 21

Data Warehouse & Data Quality 21Service Provider Management 22Reinsurance Renewal Negotiations 22Premium Reforms 22

Section 3 - Organisation BuildingChallenges 23Strategies 23Staffing Restructure 23Staff Development 24Research & Development 24Working with Agencies 24Consultative Groups 24TMF Advisory Board 25Service Level Agreement Groups 25

TMF Community 25TMF Sponsored Projects 26Risk Management & Insurance 27Performance Review & Improvement 27Investment Performance 28Accounts Payable Performance 29Budget Review 30


Section 4 - Financial StatementIncome Statement 38Statement of Recognised Income & Expense 38Balance Sheet 39Cash Flow Statement 40Notes to Financial Statement NSW Self Insurance Corporation Information 41 Summary of Significant Accounting Policies 42 Premium Revenue 49 Reinsurance and Other Recoveries Revenue 49 Investment Income 50 Claims Expenses 50 Payment to the Crown Entity 50 Other Expenses 51 Receivables 51 Reinsurance and Other Receivables 52

Derivative Financial Instruments 52 Financial Assets at Fair Value 53 Other Assets 53 Property, Plant and Equipment 54 Intangibles 55 Payables 55 Provision for Outstanding Claims 56 Provision for Restoration 57 Other Liabilities 57 Equity 57 Notes to the Cash Flow Statement 58 Income Statement of Funds 59 Balance Sheet for Funds 60 Financial Instruments 61 Commitments for Expenditure 67 Contingent Assets 67 Contingent Liabilities 68 Events After the Balance Sheet Date 68

Section � - AppendicesCode of Conduct 69Ethnic Affairs Statement 69Occupational Health and Safety 69Disability Strategic Plan 70Action Plan for Women 70Privacy Management Plan 70Equal Employment Opportunity 71Use of Consultants 72Overseas Visits 72Energy Management 72Waste Reduction Policy 72

TMF Advisory Board Membership 73Service Level Agreement Committee Groups 73Publications 75TMF Awards 75PSRMA Events 77OHS&IM Coalition 77Freedom of Information Statistics 78Legislation 84Acronyms 84

New South Wales Self Insurance Corporation - (SICorp)

Level 17, 201 Elizabeth Street, Sydney NSW 2000

Phone: 02 9228 3829Fax: 02 9228 3870Web: www.sicorp.nsw.gov.au

Postal Address:PO Box A2615, Sydney South, NSW 1235

31st October 2008ISSN: 1834-1950

External CostsTotal external production costs for this annual report were: $2,858.00 (GST Included).

Report AccessThis report is available on the NSW Self Insurance Corporation (SICorp) Web site: www.sicorp.nsw.gov.au

ACCESS

NSW Self Insurance Corporation - Annual Report 2007-087

Our mission is to support a stronger

NSW economy and better public

services through our management of the government’s self insured liabilities.

SECTION 1 - STRATEGIC MANAGEMENT

Values

• Focusing on our stakeholders• Valuing the individual• Acting with integrity • Providing leadership at all levels• Continuously learning and innovating

Services

• Administration of the Treasury Managed Fund (TMF)

• Management of other schemes i.e. the Governmental Workers Compensation Account, the Transport Accidents Compensation Fund, Pre-managed Fund Reserve and the Rail Scheme

• Management of the SICorp Data Warehouse

• Provision of reporting functions to TMF member agencies; monitoring of claims and service providers performance and provision of financial statements and budget estimates

Strategic Objectives

• Minimising State exposures • Reducing claims costs and budget impacts• Optimising the accountability of TMF agencies• Efficient and cost effective delivery of service• Maintaining full funding of liabilities

SICorp Director - Steve Hunt


About SICorpThe NSW Self Insurance Corporation (SICorp) was established by the NSW Self Insurance Corporation Act 2004.

SICorp’s principal function is to manage the Treasury Managed Fund (TMF). It is also required by the Act to manage a number of government managed fund schemes and any other government managed fund schemes that may be created in the future.

The Treasury Managed Fund (TMF) scheme provides cover for all asset and liability exposures including Workers Compensation, Property, Public Liability, Motor Vehicle and Miscellaneous Risks.

All NSW Government budget dependent agencies are SICorp’s clients. Other non budget dependent public sector agencies may join the TMF on a voluntary basis.

Message from the Director

The financial year ending 30 June 2008 was the third year of operation for the New South Wales Self Insurance Corporation (SICorp).

SICorp incurred an operating deficit for the year of $518.3 million after transferring $300 million of surplus funds to the Consolidated Fund. This compares to an operating deficit for the financial year ending 30 June 2007 of $70.2 million (after the transfer of $910 million in surplus funding to the Government).

The TMF has a policy that sets its targeted surplus at ten percent of outstanding claims liabilities plus the amount of reinsurance retention that the fund would retain for a single loss. The surplus is reviewed based on the financial results as at 31 December each year.

The underlying result was a deficit of $218.3 million. This was the result of investment loses of $355.3 million arising from the financial crisis affecting the investment markets.

SICorp’s investments are managed by the NSW Treasury Corporation (TCorp) on our behalf.

SICorp takes a long term approach to investments and targets a 7% annual return.

The result this year represents an investment loss of 7.36%. The average return over the past four years had been 9.85%. The negative result this year has reduced this average over a five year basis to 6.4%.

Our underlying claims performance has remained strong with further releases of $200 million from our outstanding claims reserves.

TMF Membership

As at 30 June 2008, the TMF had 113 member agencies. This reduction in total agency numbers of 7 from the previous year was brought about by the amalgamation of a number of agencies. New members joining were the Western Sydney Parklands Trust and Zoological Parks Board.

SICorp Branch

The Internal Audit Bureau was engaged to conduct an independent review of the structure, resources, objectives and achievements of the Branch in order to assess the effectiveness of the business model in meeting current and future business needs and priorities.

This review provided 35 recommendations addressing staffing, structure and governance of SICorp. A major recommendation currently under consideration is that a skills based Advisory Board be established to provide guidance and industry knowledge to the strategic management of SICorp.

The exiting Agency Advisory Board will be reposition as the Agency Council, and represent the view of Government agencies directly to the new board.


Agency Advisory Board and Service Level Agreement Groups

The AgencyAdvisory Board meets a minimum of four times a year reviewing all aspects of the TMF from the agency perspective. During the year we had two departures from the Board. David Roden who represented the Department of Premiers and Cabinet retired and Claudio Battilana who represented Sydney Water took up an opportunity in the private sector. We thank David and Claudio for their contribution and wish them well for their respective futures.

The Service Level Agreement Working Groups review the service delivery and the service quality provided by the Claims Managers and manage issues that arise regarding service delivery and performance levels. There are three workers compensation Service Level Working Groups and another that focuses on general insurance issues.

We place a high value on the support we receive from agencies through membership of our consultative groups and I would like to thank all our agency representatives for their commitment to these groups.

Risk Management

Risk Management is essential to an organisation’s success and is the basic premise of the TMF. The TMF supports agencies through incentives to improve their performance and through the provision of risk management services through a contracted third party.

On the 4th of December 2007, the Treasury Managed Fund (TMF) community gathered at the Westin Hotel in Sydney to attend the NSW TMF Risk Management Awards. The main focus of the awards program is to provide an opportunity for TMF agencies to move forward in their approach to risk management through sharing their risk management initiatives and recognise achievements.

The award winners were: In the Enterprise Risk Management Stream:• Integrating Risk Management into Organisational Planning Hunter New England Area Health Service for the Integrating Risk Management initiative.

• Building Capability in Risk Management (non OHS) Highly commended: BusinessLink for their approach to building capability in risk management. • Preventing Insurable Risk (non Workers Compensation) NSW Health Risk Management Liaison Committee

In the Occupational health and Safety and Injury Management Stream:

• Safety Leadership and Accountability NSW Health for the NSW Health OHS&IM Profile Tool.

• OHS&IM Knowledge, Capability and Participation State Emergency Service for the SES Critical Incident Support Program.

• Injury Management Department of Disability, Ageing and Home Care for Injury Management - Making a difference.

Finally, the 2007 OHS&IM judges decided to present an additional award to the NSW Roads and Traffic Authority to acknowledge their long term contribution to OHS&IM within the TMF.

Dr Margy Halliday was also presented with an award acknowledging her contributions to the TMF community as chair of the PSRMA committee.

Detailed information on the awards program can be found in Section 5.

In Summary

The fund has suffered the impacts of the global financial crisis but its underlying performance has remained sound.

We have now completed three years of operation under our new multi claims manager model and are currently preparing for the challenges of the next round of tenders for claims management and other services.

Our aim is to continue to improve our business model in order to support improved management of risk in the public sector.


TMF StructureUnder the current TMF management arrangements there are five claims management roles. These roles consist of three Workers Compensation portfolios, a general insurance portfolio and a separate portfolio for medical indemnity.

The Workers Compensation portfolios and their claims managers are:

Workers Compensation No.1 (50% of Health, Department of Education and Training) – GIO General Limited

Workers Compensation No. 2 (50% of Health, Corrective Services and Juvenile Justice) – Employers Mutual Limited

Workers Compensation No. 3 (all other agencies for workers compensation) – Allianz Australia Insurance Limited

The Health Liability Claims portfolio incorporates all liabilities incurred on or after 1 July 1989 in respect of common law liability classes, including public liability, products liability, professional indemnity, directors/officers liability, contract liability and medical liability for the Department of Health, including all Area Health Services. The claims manager for the Health Liability Claims is GIO General Limited.

The General Claims portfolio includes all other classes of business including general liability, property, motor vehicle and miscellaneous covers. GIO General Limited also manages these claims.

All claims management contracts were awarded for five years from 1 July 2005 to 30 June 2010.

In addition there are separate contracts for:• Actuarial Services• Reinsurance Services• Risk Management Services

Actuarial Services – PricewaterhouseCoopers Actuarial– Taylor Fry Pty Ltd Actuarial Services contracts were awarded four year contracts to 30 September 2009.

Reinsurance Services – Benfield (Australia) Pty LimitedBenfield was awarded a four year contract to 30 September 2009.

Risk Management Services – Suncorp Risk Management ServicesSuncorp Risk Management Services was awarded a four year contract to 30 June 2009.

Sydney Harbour Bridge


Size of all Lines of Business by Premiums (GST Inclusive)

Size of Worker’s Compensation by Premiums (GST Inclusive)

2006-07 2007-08

2006-07 2007-08

Workers Comp No.1 - GIO: $229,614,478

Workers Comp No.2 - EML: $102,175,728

Workers Comp No. 3 - Allianz: $154,380,787

Workers Comp No.1 - GIO: $232,870,967

Workers Comp No.2 - EML: $99,587,137

Workers Comp No. 3 - Allianz: $164,535,096

Workers Compensation GIO, EML, ALLIANZ

$486,170,993

Workers Compensation GIO, EML, ALLIANZ

$496,993,200

Miscellaneous GIO

$13,976,600

Miscellaneous GIO

$13,438,700

Public Liability GIO

$327,927,996

Public Liability GIO

$316,230,662

Property GIO

$81,946,150

Property GIO

$82,333,300

Motor Vehicle GIO

$32,279,300

Motor Vehicle GIO

$34,425,200

Workers Comp No.1GIO

Workers Comp No.2EML

Workers Comp No.3Allianz

Workers Comp No.1GIO

Workers Comp No.2EML

Workers Comp No.3Allianz


SICorp Management Team

Steve Hunt Robert Lloyd

John Camage Brad Cole

Dilip Shah

Director of SICorp Technical Adviser

Systems Administrator Performance Review Manager

Data Analyst Manager

Key Achievements• Renegotiated Re-insurance policy wording• Managed operating performance of SICorp• Maintained key relationship with stakeholders

Key Achievements• Developed the SICorp Strategic Plan • Reviewed Contract of Coverage• Represented SICorp on the Working Together Strategy

Key Achievements• Improved data quality through development of new Interface Specifications for Data Submissions for all lines of business.• Initiated the development of the new SICorp Website and Risk InSite Portal.• Upgraded Communication links from SICorp to NSW Treasury and AC3.

Key Achievements• Oversighted claims management, actuarial, risk management and reinsurance services contracts• Managed SICorp’s responsibilities under the Freedom of Information Act 1989• Developed procedures for provision of legal services to the TMF

Key Achievements• Implemented new Workers Compensation (WC) premium hindsight methodology• Implemented changes to WC Benchmarks and Funding methodology• Set up customised reports for agencies on data warehouse

Executive Performance

Based on the criteria of SICorp’s Performance Agreement and Review scheme (PARs), SICorp Executive members were assessed as either meeting or exceeding standards for overall performance, competencies and adherence to SICorp values.

All members satisfied the responsibilities specified in their annual performance agreements in an efficient and effective manner.


SICorp Organisational Structure

Director

Insurance TechnicalOfficer

Administration Coordinator

Director’s Assistant

Data Warehouse Systems Administrator

Assistant Systems Administrator

Senior Business Analyst

Training & Communications

Officer

Data Warehouse Help Desk

Data Analyst Manager

Data Analyst

Senior Data Analyst

Data Analyst

Performance Review Manager

Senior Performance Review Officer

Performance Review Officer

Assistant Performance Review Officer

Assistant Data Analyst

Staff Numbers and Grading Structure

There are 19 positions, including an SES position. All Staff are employees of NSW Treasury

2005/06 2006/07 2007/08M F T M F T M F T

Branch Director (SES Level 2) 1 0 1 1 0 1 1 0 1Technical Insurance Officer (TTO Grade 2) 1 0 1 1 0 1 1 0 1Grade 11-12 3 0 3 3 0 3 3 0 3Grade 9-10 2 2 4 3 1 4 3 1 4Grade 7-8 0 3 3 0 3 3 0 3 3Grade 6-7 1 0 1 1 0 1 1 0 1Grade 5-6 1 2 3 1 2 3 1 2 3Grade 3-4 0 2 2 0 2 2 0 2 2Treasury Graduate 0 0 0 1 0 1 1 0 1Total 9 9 18 10 8 18 11 8 19

Treasury Graduate

SICorp Grading Structure

SICorp Organisational Structure


TMF MembershipAs at 30 June 2008 the TMF provided services to over 113 Agencies giving rise to 184 premium entities.

TMF membership offers eligible agencies benefits that are unique and unobtainable from the commercial insurance market. TMF provides its member agencies unlimited cover worldwide with few exclusions (illegal operations, wear and tear, inherent vice, pollution other than sudden and accidental) or conditions. TMF agencies have no exposure to reinsurance failure and are not affected by exclusions to reinsurance or gaps in the cover reinsurers provide eg terrorism. Those risks are born by the Fund.

In return, the requirements for membership are few:• Agencies cannot enter TMF for only an individual class of insurance. Entry is only

available for all lines. TMF does not allow agencies to select against it in hard insurance markets only to withdraw when market conditions improve.

• While membership is mandatory for budget dependant agencies, it is available at the Treasurer’s discretion for non-budget dependant entities.

TMF encourages the active adoption of risk management practices and supports this through financial incentives.

By joining the TMF, agencies can be assured they have taken advantage of the most comprehensive and effective cover that is available to them.

New Members joining were Western Sydney Parklands Trust and the Zoological Parks Board.

Premium SettingThe first step in the premium setting process is the calculation by actuaries of target premiums for each financial year. The target premium represents the actuarial global estimate of the total fund claims costs and expenses for the ensuing year. Target premiums are then allocated to agencies as deposit premiums.

Deposit premiums are set based on a weighting between an agency’s own experience and an appropriate external benchmark measure. For workers’ compensation, benchmarks are derived from private industry counterparts or interstate comparisons of similar operations. These are also used for determining the level of funding allocated to budget agencies to cover their premium. A surplus/deficit between the funding and deposit premium indicates an agency’s performance.

For workers’ compensation and motor vehicle policies, the premium methodology incorporates a hindsight adjustment mechanism. An agency whose experience has improved from the original premium calculation will receive a hindsight incentive payment. However, where an agency’s experience has deteriorated, that agency is required to make a hindsight payment.

Members of the NSW Rural Fire Service


Premium Performance Indicators2003/04 2004/05 2005/06 2006/07 2007/08 2008/09*

Workers Compensation - Incurred claim cost as a percentage of wages

3.13% 2.92% 2.83% 2.34% 2.31% 1.92%

Liability - Incurred claim cost per employee (excluding VMOs)

$1,131 $1,096 **$951 $856 $818 $806

Motor - Incurred cost per vehicle.

$864 $843 $830 $809 $829 $849

Property - Incurred claim cost as a percentage of Total Asset Value.

0.14% 0.14% 0.12% 0.10% 0.09% 0.09%

* Forecast Amount** Tort law reforms that were introduced from 2002 began to positively impact the liability portfolio

Workers Compensation Risk Premium Rates by Claims Manager

R isk P rem iu m R ates b y C la im s M an ag er

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Fu nd Ye a r

Risk

Prem

ium

Rate

S c hem e A A L E M L G IO


Risk Premium Rates by Claims Manager

Narrative:

1. All portfolios have shown marked improvement in particular since the new contracts in 2005.

2. Changes in experience and risk premium are an outcome of the combined agency sector claims incidence, agency practices and the claim agent performance.

3. Each portfolio has inherent characteristics that influence outcomes.

Workers Compensation Portfolio Split:

GIO General LimitedWorkers Compensation No.1 (50% of Health, Department of Education and Training)

Employers Mutual LimitedWorkers Compensation No. 2 (50% of Health, Corrective Services and Juvenile Justice)

Allianz Australia Insurance LimitedWorkers Compensation No. 3 (all other agencies for workers compensation)

Services DeliveredAdministration of the Treasury Managed Fund (TMF) & Other Schemes

The administration of the TMF and other funds entails a number of duties including:

• Evaluation and re-evaluation of the fund management structure to ensure that the best performing and sustainable model is being utilised.

• Developing detailed tender documentation to secure appropriate Service Providers

• Negotiating and managing contracts with Service Providers

• Communicating with oversight bodies such as NSW WorkCover

• Evaluating investment potential for the TMF

• Communicating relevant information about the TMF to stakeholders.

Management of the TMF Data Warehouse

In accordance with the multiple provider model, SICorp recognised the need to have a single repository of all relevant information. As a result the TMF Data Warehouse was introduced.

The implementation of the Data Warehouse has made the following services available:

• Access to historical claims data for the purposes of analysing and reporting.

• Oversight on the data being captured by service providers to ensure appropriate data is being collected.

• Measurable and comparable Data Quality between the different claims providers

• An interface between the Agencies and NSW WorkCover

• Data continuity in the event of a change of service providers after the tender period.

• Data for comparative study on the performance of each claims provider to establish an environment of competition.


• Provision of reporting functions to TMF member agencies

• Monitoring of claims experience

Monitoring service providers

The multi provider model allows for an environment where the performance of each claims provider can be compared. This promotes competition and constant improvement. It also provides SICorp with proven ‘best practice’ principals that can be shared with the other service providers leading to improved service for all TMF member agencies.

Providing financial statements and budget estimates

The provision of financial statements and budget estimates, allows Treasury to assess the overall performance of the TMF. It also helps to highlight areas of concern that may adversely impact on the cost of insurance to government.

Contract of Coverage• Motor vehicle

• Miscellaneous losses, notably, due to employee dishonesty, personal accident and protection for overseas travel.

The extent of cover provided under the TMF’s Contract of Coverage is unique to TMF agencies. Exposures not included are:• illegal activities• wear and tear, and inherent vice• pollution (not being sudden and accidental pollution). The TMF is protected by a wide-ranging reinsurance program.

The TMF has been a leader in public sector self insured managed fund arrangements. This is due in no small part to the close cooperation that has been built over the years between key participants. These key participants are:

• the NSW Self Insurance Corporation (SICorp) which oversees the operation of the TMF and sets the policies

• the TMF Advisory Board, a body that represents the interests of the broad spectrum of the TMF’s membership

• participating NSW Government agencies (responsible for managing their operations so as to minimise costs)

The “Contract of Coverage” is the New South Wales Government’s explanatory document for its Self Insurance Scheme.

When the NSW Government introduced its risk management self-insurance scheme known as the Treasury Managed Fund (TMF), on 1 July 1989, it established the need for an indemnification document to take the place of traditional insurance policies that was simple, all-encompassing and would cover virtually any loss that TMF agencies would encounter.

The Contract of Coverage dictates the New South Wales government’s response to the TMF agencies when loss or damage is suffered. The TMF is not subject to the Insurance Act 1973 (Cth); nor is it subject to the regulatory control of the Australian Prudential Regulation Authority. Coverage is provided for all claims incurred on or after 1 July 1989 or the date the agency joined the TMF. The coverage is without peer in the commercial insurance market. The TMF provides cover worldwide in respect of :

• Workers’ Compensation as per NSW statute

• Liability, including, but not limited to, public liability, products liability, professional indemnity, directors/officers liability and medical negligence

• Property (full replacement, new for old, and consequential loss)


• the contracted Service Providers, to which the Treasury has outsourced the management of the services provided to TMF agencies, particularly in the areas of claims management and risk management

• actuarial services.

A copy of the Contract of Coverage is available on the SICorp web site: www.sicorp.nsw.gov.au

Guarantee of Service & Consumer ResponseSICorp has always held itself and its service providers to the highest levels of customer service. In 2007-08 many of those levels were formalised in the finalisation of Service Level Agreements (SLA) for:

• Workers Compensation• Public Liability • Property & Miscellaneous Claims

The SLA working parties continue to meet to constantly measure the performance of service providers to the levels prescribed in the SLA documents and continually review those documents to ensure all of their business requirements are provided for.

SICorp actively collects consumer response through: • Regular liaison meetings with agencies and service providers• SLA working parties• TMF Advisory Board• Claimant contact with the Performance Review Team• TMF Help Desk

To accurately gauge our consumer’s sentiments SICorp conducted a TMF Agency Satisfaction Survey in June 2008. This survey was designed to measure client satisfaction and at the time of publication the result for this survey were being collected and analysed.

SICorp Commitment to StakeholdersSICorp oversees and works in coalition with all service providers and oversight bodies to reduce the resources being utilised by agencies for the purposes of insurance.

In turn Treasury can reallocate those resources back to government agencies to be applied to the delivery of infrastructure and services for the people of NSW.

SICorp’s major stakeholders include:• NSW Treasury• TMF member agencies • WorkCover NSW• Claims Management Service Providers• Risk Management Service Providers• Actuarial Service Providers• SICorp Staff• People of NSW

Commitment to Treasury• Efficient and effective administration of the TMF• Provision of accurate, relevant professional and timely advice and information

Commitment to Agencies• Working in a partnership to pursue the successful reduction of claims• Regular consultation, openness and mutual respect

Commitment to WorkCover NSW• Efficient and timely delivery of information to assist on oversight activities• Working in a partnership to provide and communicate strategies to protect the NSW public sector workforce.

Commitment to Claims Management Service Providers• Clear guidelines, expectations and objectives• Incentives for excellence in service delivery

Commitment to Risk Management Service Providers• Clear guidelines, expectations and objectives• Support and funding for risk management initiatives


Commitment to Actuarial Service Providers• Clear guidelines, expectations and objectives• Efficient and timely delivery of information to assist with actuarial reconciliations

Commitment to SICorp Staff• Job satisfaction, personal development and career opportunities• Strong leadership and effective management

Commitment to the People of NSW• Full cover for all the people and assets that belong to the community• Access to information

SICorp Stakeholder Matrix

Reduce resources utilised for the purpose of insurance

Greater resources available to provide services, facilities and

infrastructure for the state=

Treasury supply financial resources to government agencies, including the

resources utilised for the purposes of insurance

SICorp oversees and works in coalition with all service providers and authorities to assist agencies in preventing insurance claims and

successfully managing existing insurance claims

NSW TREASURY

SICorp

WorkCoverNSW

ClaimsManagement

ServiceProviders

RiskManagement

ServiceProvider

ActuarialService

Providers

ReinsuranceServiceProvider

NSW Government Agencies

The People of NSW


SECTION 2 - The Year In Review

Our ChallengesThe challenges of 2007/08 were:• Critically assessing our role and structure in the management of the TMF

• Undertake a review of the structure and governance using the resources of the Internal Audit Bureau (IAB)

• Having identified issues in the IAB report, creating practical responses and implementing them

• Enhance the quality of the data in SICorp’s Data Warehouse

Our StrategiesOur strategies to address some of those challenges were:• Looking at the corporate governance of the branch and evaluating if that was the best model for continued operation.

• Implementing Recommendations stemming from the IAB report.

• Implementing changes to the Data Warehouse management and focusing time and resources to improve data quality.

IAB Recommendations and ImplementationsAs part of the SICorp Business Plan and independently commissioned by SICorp, the Internal Audit Bureau (IAB) was engaged to conduct an independent review of the structure, resources, objectives and achievements of the Branch in order to assess the effectiveness of the business model in meeting current and future business needs and priorities.

IAB provided 35 recommendations addressing areas of:-• SICorp’s Strategic Plan• The branch structure• Data Warehouse management and structure (other recommendations from a previous review of the Data Warehouse have been implemented)• Role and communications• Governance.

Action has been taken to address each of these recommendations, in particular:• Our strategic plan has been developed and is available on SICorp’s web site• The branch structure is under review with a greater focus on SICorp’s communications and relationships with key stakeholders• The role of Data Warehouse Manager has been filled and a new structure within the Data Warehouse is being implemented• A new web site has been developed to improve our ability to communicate with our stakeholders• A skills-based Advisory Board with 5 members will be established to provide guidance and industry knowledge to the strategic management of SICorp.


After a review of the Data Warehouse infrastructure and useability, the database design was enhanced to provide better access to Workers Compensation data and to include additional fields that would significantly improve the presentation of data in reports.

In addition to the database modifications, new interface specifications for data submissions to the warehouse were developed, providing a mechanism that SICorp can use to measure and control the quality of the data loaded to the data warehouse.

The Miscellaneous, Motor Vehicle, Property and Liability interface specifications were implemented as at 30 June 2008.

The new Workers Compensation specification is due to be implemented by the 4th quarter of calendar 2008 after lengthy consultation with all claims management service providers and WorkCover NSW

In conjunction with the development of the interface specifications, new validation checks were developed to access a number of imperative fields in the data warehouse. From this a reporting mechanism was designed to facilitate the identification and resolution of data submission issues, in consultation with Allianz, EML and GIO.

Improvement was also seen in the reconciliation of the data in the data warehouse against the data held by our actuaries PwC . In part this was due to data extracts being refined and redesigned to enhance their accuracy. The same process was undertaken in data extracts being sent to WorkCover

Data Warehouse & Data Quality

Improvements to Communications

Improvements to Communication SICorp identified a need to innovate the ways in which it communicates with agencies; and as a result SICorp undertook a project to redevelop its web presence.

The aims of this project were to:• Create a web infrastructure that would enable the SICorp web site to become a one-stop- shop for all the insurance needs of the TMF community. This included a central communications hub for all TMF service providers.

• Integrate the current Cognos reporting tools with portal functionality such as, single sign-on security, intuitive navigation, centralised community calendar, advanced search functionality, community knowledge base and community forums.

• Allow for the application of different security gateways increasing the possible content that could be published to the SICorp website to include actuarial reports, data warehouse training manuals, quarterly reports and Working Together targets.

• Enabled the SICorp web presence to meet the requirements of the Government Website Style Directive.

• Create a web presence that would allow all agencies to more effectively utilise the data warehouse as the single source for all insurance reporting.

The web portal software and infrastructure were in place by June 30, 2008 with the final launch of the new site scheduled for September 2008.


Service Provider Management

During 2007/08 the Performance Review Team continued to monitor and actively manage the performance of claims management, actuarial, risk management and reinsurance service providers.

Audits were undertaken of claims manager compliance with contracted service standards for workers compensation, public liability, property and motor vehicle claims.

The four Service Level Agreement Working Groups comprised of SICorp, claims managers and TMF Agency representatives for each of the three workers compensation portfolios and the Health liability and general claims portfolios met quarterly to review claims manager performance issues.

Reinsurance Renewal NegotiationsDuring the year SICorp successfully negotiated the renewal of its reinsurance program. All covers were placed to a minimum of 100% prior to expiry of the policies and signed lines were agreed by SiCorp and advised to reinsurers prior to inception of cover for 2008-09. A restructure of the Liability

placement was undertaken and policy wordings were revised.

The table below depicts the 2008/09 program structure.

AUD3bn

AUD1bn

AUD710m

AUD600mAUD530m AUD530m

AUD 300m AUD 300mFine Arts

AUD 200m

General Liability, Public, Products, Bush & Grassfire, Breach of Duty of care, waste recycling

AUD150mAUD 100m AUD 100m

PCIP PCIPProfessional Contract AUD60m

Indemnity Works

SELF INSURED RETENTIONAUD 20m AUD 20m AUD 100m AUD 10m AUD 25m AUD 10m AUD 10m AUD 25m AUD 25m AUD 10m AUD 25m AUD 10m AUD 10m

Notes:The Primary layer of the General Liability programme includes Medical Malpractice, Waste Liability, PCIP Liability and Directors' & Officers' Liability

Aviation Liability

Marine Liability

XL Umbrella Tranche - AUD

100m


100m


100m

50%

Workers Compensation

Unlimited xs AUD100m (50%)

Terrorism

Property

Medical Malpractice

Director's & Officers Liability Contract

Works

PCIP General Liability

Premium Reforms

2008 Premium Reforms

Following a review of the current workers compensation benchmark and deposit premium methodology by the TMF actuary, PricewaterhouseCoopers, a revised deposit and hindsight premium methodology and approach

to the determination of funding and industry benchmark premiums apply for all fund years from 2008/09 onwards.


SECTION 3 - Organisational Building

Our Challenges

The challenges moving forward are:

• Tender for service provision in a manner consistent with our Strategic Plan.

• Develop an information strategy that appropriately services our stakeholders while leveraging our IT infrastructure.

• Find innovative and strategic ways of knowledge sharing across the TMF Community to ensure the spread of best practise methodology to reduce the frequency and cost of claims.

Our Strategies

The development of the SICorp Strategic Plan 2007-2010 has gone a long way in shaping the strategies for all future Organisation Building.

This document was developed to ensure that SICorp goals were consistent with the Treasury Corporate Plan and were transparent to all of the stakeholders within the TMF Community.

It was also developed to ensure that all efforts were targeted towards 5 over arching goals:1. Miniminsing State exposure2. Reducing claims costs and budget impacts3. Optiminsing accountability of TMF agencies4. Efficient and cost effective delivery of service5. Maintaining full funding of liabilities

The strategic plan can be found on the SICorp Web site: www.sicorp.nsw.gov.au

Staffing RestructureConsistent with the goal of delivering efficient and cost effective services, over the last 18 months Sicorp has reviewed every function and role within the branch.

A new branch structure has been developed that better reflects the work of the existing staff within SICorp. Role descriptions and business unit structures are being reviewed as a means of more accurately representing what staff members are contributing and ensuring that they are appropriately remunerated for it.

Equally gaps in services such as communications and certain data warehouse functions are being filled to ensure quality targeted service moving forward.

SICorp Staff Members Basundhara Dhugel & Carolyn Di Paola


Staffing DevelopmentSICorp recognises that its people are the corner stone for success. As such one of its ongoing objectives is to up skill all SICorp Staff.

In 2007-08 a number of courses were offered addressing both technical and non-technical issues including advanced writing skills, performance analysis and interpersonal skills.

SICorp staff were fortunate to enjoy benefits from both learning and development opportunities offered internally and as employees of Treasury, through the Office of Financial Management (OFM).

Like OFM, SICorp has a target to ensure that each employee has at least 5 days of annual training.

Staff Development 2005/06 2006/07 2007/08 TargetTraining days per staff member 5.0 days 5.2 days 5.3 days > 5 days

Research & DevelopmentIn 2007-08 SICorp undertook and number of research and development projects, including: • Testing and implementation of the new interface specification with the claims managers for Liability, Motor, Property and Miscellaneous.

• Bring SICorp’s requirements up to date and ensure claim manager data in the monthly submissions is validated to ensure it contains high quality, reliable and accurate data. • Design, testing and implementation of Cognos reports for the Critical Service Standard 3 • Putting in place a method to ensure Claim Managers are responsible and accountable for data being sent in the monthly submissions.

Working with Agencies

SICorp recognises that agencies are one of their significant stakeholders and as such have a focus on working with them to achieve positive outcomes. SICorp believes in the principles of transparency and consultation with all its stakeholders.

As such, SICorp has arranged the creation of a number of groups that include both agency and service provider representatives.

Consultative GroupsThroughout 2007-08 the various internal assessment processes that SICorp has undertaken have required specialist consultative groups to be convened, so that external contractors can understand and relate to the needs and requirements of SICorp’s various stakeholders. These specialist groups have ranged from mixed agency and claims manager groups to specific agency functional groups.

Moving forward, SICorp will be dependant on the continued involvement and feedback from the various consultative groups that are called as they enable the staff at SICorp to capture the needs and requirements of all TMF member agencies. June 07 - PSRMA Seminar


TMF Advisory BoardThe role of the Board is to serve as a consultative forum through which agencies can provide feedback to SICorp:• Facilitate greater participation by agencies in processes affecting the operation of the TMF• Review and make recommendations on issues affecting members’ performance• Review and foster best practice across agencies• Provide agencies with a forum in which concerns can be raised and information disseminated on issues impacting on TMF members

• Provide a forum where agencies can appeal the recommended allocation of risk management resources • Board members must assume a top-level perspective, considering the interests of all agencies participating in the TMF, not merely his/her own agency.

The Board meets a minimum of four times a year. Meetings may be held in the interim if important issues arise.

The Board may make recommendations directly to the Secretary of the Treasury.

Service Level Agreement GroupsSICorp felt that it was important to continue the principles of consultation that had been initiated with the Consultative Groups in the initial phase of operations. For this purpose, four groups were

formed with the intention of monitoring and reviewing Service Level Agreements between Claims Management Service Providers and the Agencies they support

TMF CommunitySICorp benefits from a large network of consultative and peer groups throughout the TMF Community. These groups act as an information forum for agencies to share knowledge, experience and best practice models in the fields of Risk Management, Occupations Heath & Safety, Injury Management and Rehabilitation.

PSRMA(Public Sector Risk Management Association)

The PSRMA is dedicated to the advancement of the Risk Management discipline through promotion, consultation and the sharing of better practice within and external to the NSW Public Sector.

The do this by providing forums which give their memebers:• Knowledge Transfer & Communication • Sharing Best Practice • Collective Voice of the Agency Members of the Fund • Avenue for Consultation • Support Government Priorities & Initiatives • Provide a Practitioners Network

The focus for the PSRMA in 2007-08 was broad covering topics which included a public sector response to bullying and harassment, risk management frameworks and corporate compliance.

As well as their own forums and presenters the PSRMA extended their network with and in principal agreement with the Risk Management Institute of Australia (RMIA) to share knowledge and experience to promote the discipline of Risk Management on a wider scale.

OHS&IM Coalition(Occupation Health & Safety and Injury Management)

The Coalition’s purpose is to:-• promote best practice and continuous improvement in NSW public sector OHS• provide a forum for consultation and dissemination of information by central agencies• actively communicate with public sector OHS practitioners, share information, solutions and collaborate on information initiatives.


Key focus areas identified by the Coalition for 2007-08 include: • Agency strategies for preventing and managing psychological injuries• Health promotion strategies • Aggression, bullying and client initiated violence • Fatigue management and shift work• Public Sector OHS&IM conference• Implementation of Working Together, the Public Sector OHS&IM Strategy 2005-2008.

PSRCN(Public Sector Rehabilitation Co-ordinators Network)

The PSRCN has a focus on supporting Rehabilitation professional within the TMF community and allow the sharing of ideas and initiatives.

Risk Management Leadership Group

Risk Management Leadership Group was developed in to provide an opportunity for TMF Community members, who are active in this area, to share ideas and facilitate interagency learning.

TMF Sponsored ProjectsAs part of its commitment to working with Agencies, SICorp also sponsors special interest projects coordinated by their Risk Management Service Provider, Suncorp.

In 2007-08 the sponsored projects included:

Facilitated Risk Management Assessment Tool

This is a tool that provides a transparent, consistent and fit for purpose framework to support decision-making at all levels.

It was strategically designed so that agencies could be assessed with a clearly defined, integrated approach that has a balance between prevention and response.

This assessment provides insight into areas of good performance, areas that require attention and areas that had not been considered in an agencies Risk Management plan.

OHS Self Assessment Tool (OHSAT)

The OHSAT Provides a Standard to assess the quality of an agency’s OHS management system, whether it is being implemented and where it can be improved.

This then shows whether• Leaders are committed• Managers are accountable• Improvement planning is a priority• Program implementation is robust and consistent • A regular schedule of measurement and evaluation is in place• There is a focus on review and improvement.

Members of the NSW Ambulance Service & NSW Fire Brigades

Sydney Olympic Park


Risk Management & InsuranceAs staff for SICorp are employed by NSW Treasury, they share the same insurance arrangements as their colleagues in the Office of Financial Management.

NSW Treasury is a member agency of the NSW Government’s self insurance Scheme, the TMF. TMF covers SICorp for:• Workers Compensation• Public Liability• Property• Comprehensive Motor Vehicle

• Other miscellaneous risks.SICorp takes positive steps to reduce risks to not only achieve lower premiums but to act as an example for other TMF member agencies.

SICorp manages workers compensation risks by:• early intervention• workplace inspections• active rehabilitation.

Performance Review & ImprovementSICorp has a three pronged approach in looking at their performance and any potential improvement:1. Performance of Individual Employees2. Operational Performance of the Branch3. Service Performance for the Stakeholders

Performance of Individual EmployeesAs NSW Treasury staff, all employees of SICorp utilise the Performance Agreement and Review system (PARS). This performance management system asks each employee in consultation with their management to set 6 monthly objectives.

Operation Performance of the Branch In 2007-08 SICorp utilised the recommendations provided in the IAB independent reviews of the data warehouse and the branch structure as a road map for continued improvement to the branch.

All of the recommendations were entered into a project plan and were successfully implemented throughout the year.

Included in those recommendations were some criteria for benchmarking performance and progress. SICorp will have comparable data in 2008-09 to report on.

Also relevant to SICorp operations was the commencement of a critical service standard established to enable Claims Managers and SICorp to work on data quality issues and provide SICorp with a measurement tool to assess the responsiveness of claims managers to issues of data quality.

Service Performance for the Stakeholders There are a number of forums used by SICorp to assess levels of satisfaction within the TMF community, including the TMF Advisory Board and the PSRMA.

In 2007-08 SICorp formalised this approach by developing a survey that was circulated in June to all TMF Agency staff to measure their satisfaction and provide baseline information for measurement of future performance. At the time of publication of publication the results of the survey were being collated and analysed.

SICorp Staff Member - Mario Chrisianto


Investment Performance

SICorp contracts the NSW Treasury Corporation (TCorp), the State’s central financing authority which has recognised expertise in the management of financial risks, to advise on, and actively manage these risks in line with the Memorandum of Understanding (MoU) between it and SICorp. TCorp actively manages and reports on the risks associated with the holding of financial instruments.

The MoU is updated annually to include changes in market conditions and/or management’s direction and clearly sets out investment management objectives, restrictions, and establish performance benchmarks. The MoU is authorised and approved by the Executive of the NSW Treasury.

As at 30 June 2008, SICorp investments total $4,139 million. Total investment holding, by fund, is shown in Graph 1.

Investments are held in the following TCorp investment facilities:

• Bond Portfolio • TMF Hour-Glass Facility • Medium-Term Growth Facility • Long-Term Growth Facility

In 2006 SICorp adopted the move from 40 per cent to 50 per cent growth asset allocation after Strategic Asset Allocation (SAA) review by INTECH Investment Consultants and with full consultations with TCorp. The investment strategy is considered appropriate as it is expected to earn the required rate of return which will be sufficient to fund the outstanding claims liability.

SICorp implemented the SAA in 4 tranches during the financial years of 2005-2006 and 2006-2007 and achieved strong investment returns. The recent downturn in the international and Australian share markets resulted in negative returns during 2007-08. However forward budget estimates assume investment earnings will return to long-term trend levels of 7.2 percent.

As at 30 June 2008, growth assets which include international and Australian equities, and listed property represent approximately 50 per cent of total investment.

2007-08 full year returns for each fund, by asset class, is shown in Table 1.

In v e s tm e n ts @ 3 0 J u n e 2 0 0 8

Treas uryManaged Fund

$3,947 million

Trans por tA c c idents

Compens ation$134 million

Gov ernmenta lW orkers

Compens ation$58 million


Table 1

FY 2007-08 Returns (%)TMF Bond Portfolio 4.97 Hour-Glass Investments Cash 6.84 Australian Shares (17.06) Indexed Australian Shares (13.55) International Shares (21.89) Indexed International Shares (21.00) International Bonds 9.60 Listed Property (21.40 TOTAL TMF (7.36)

GWC and TAC Medium-Term Growth Facility (0.57) Long-Term Growth Facility (10.27)TOTAL GWC and TAC (5.43)

The average annual rate of returns for TMF is shown in Table 2.

Table 2TMF Investment Average Annual Return %

1 year to 30 June 2008 (7.4)2 years p.a 1.03 years p.a 4.34 years p.a 5.65 years p.a 6.46 years p.a 6.07 years p.a 5.38 years p.a 5.7

Accounts Payable Performance

For the year ended 30 June 2008

Finance officers of the Crown Asset and Liability Management branch (CALM) in the Office of Financial Management (OFM) provide the financial accounting services to SICorp.

The payment process requires verification and approval by delegated SICorp officers before payment is processed at CALM. The two business areas operate at different locations.

SICorp consistently ensures that all accounts are paid promptly in accordance with the requirements of the Public Finance and Audit Regulation 2005, the Annual Reports legislation and the Treasurer’s Direction.

The following table reports on the total time taken by SICorp and CALM officers to administer payments.


Value of outstanding invoices by age at the end of the quarter

Quarter Current (ie within due

date)

$

Less than 30 days overdue

$

Between 30 and 60 days

overdue

$

Between 60 and 90 days

overdue

$

More than 90 days overdue

$Sep - 07 219,943 2,706,827 45,186 - *15,877Dec - 07 3,248,326 2,973,093 2,602 *58,300 -Mar - 08 351,652 17,248 600 - -Jun - 08 3,660,860 - - - -

* Original invoice not received or lost. Payment made immediately once replacement invoices were received.

Accounts paid on time during each quarter

Quarter Total Account Paid on Time Total Amount Paid($)

Target % Actuals % $By Numbers By Value

Sep - 07 80 88% 99% 49,694,738 50,163,381Dec - 07 80 85% 90% 25,820,012 28,646,636Mar - 08 80 84% 94% 45,633,853 48,713,396Jun - 08 80 91% 97% 27,264,030 28,077,285

In 2007-08 there were no instances where penalty interest was paid in accordance with section 18 of the Public Finance and Audit (General) Regulation 1995

There have been marked improvements in the time taken for payment approvals to reach CALM.

During the year the target for total accounts paid on time increased to 80 per cent from 75 per cent. The accounts paid on time achieved were higher than the increased target level in terms of number and value of invoices.

Budget Review

2007-08 Actual Compared To Budget

The following analysis compares current year operating result and financial position, on an accounting basis, with budget.

Operating Result

For the year ended 30 June 2008, SICorp’s operating result was a net deficit of $518.3 million as compared with the budget deficit of $163.4 million.

The increase in deficit was mainly due to a fund transfer to Crown Entity in accord with its Net

Assets Holding Level Policy and the investment loss experienced in the TCorp Hour Glass Facilities during the year.

Net Assets Holding Level Policy

SICorp will make payments to the Crown Entity when it has net surplus assets over the required target level based on the 31 December financial position.

As at 31 December 2007, the net surplus assets position over and above the required level allowed for a payment of $300 million to the Crown Entity. This payment follows the $910 million payment made in 2006-07.


The result from the ordinary insurance business after adjusting for this payment was a reduced deficit of $218.3 million for the year.

Revenues and Expenses

Total revenue reduced by $720.6 million (60.6 per cent) to $469.3 million. The decrease was primarily due to the investment loss of $355.3 million as a result of fall in Australian and overseas equity markets following the global credit crisis during the year.

This loss was not anticipated during 2008 budget preparation at which time the financial markets were enjoying strong growth. The budget included $370.8 million investment income.

Total expense was $987.7 million. This is a reduction of $365.7 million (27.0 per cent) compared to budget. The key factor in the decline of total expenses was due to net gains in actuarial valuation of outstanding claim liability of $199.1 million compared to the originally estimated actuarial loss of $278.9 million.

Total difference in the actuarial valuation gain is partially offset by payment to the Crown Entity of $300 million, an increase of $100 million from the budget.

The substantial gains from actuarial valuation of outstanding claims reflect the following key drivers:• A reduction in outstanding claim of public liability portfolio in relation to Visiting Medical Officer pool due to a number of years of good experience

• Substantial reduction in weekly benefit payments as a result of improved agency occupation health and safety (OH&S) management

• Effective claims management following the introduction of the new multi-claims provider model.

VarianceItem Actuals Budget $M %Revenue 469.3 1,188.8 (720.60) -60.5%Expenses 987.6 1,353.3 (365.70) -27.0%(Loss)/Profit (518.3) (163.4) (354.9) 217.4%

(6 0 0 .0 0 )

(4 0 0 .0 0 )

(2 0 0 .0 0 )

0 .0

2 0 0 .0

4 0 0 .0

6 0 0 .0

8 0 0 .0

1 ,0 0 0 .0

1 ,2 0 0 .0

1 ,4 0 0 .0

R e ve n u e E xp e n s e s (L o s s )/P ro fit

M illionIn c o m e Sta te m e n t

Actu a lsB u d g e t

* Note

* Note: This inc ludes the trans f er of $300 million.


Assets and Liabilities

The major factors that reduced the actual assets to budget were:

• An investment loss result of $355.3 million

• The payment of $300 million to Crown Entity

• Reinsurance and other recoveries receivables being lower than the budget by $26.9 million.

Total value of liabilities of $4,235.7 million was lower than the budget of $4,652.2 million by $416.5 million (8.8 per cent). This movement was the result of provisions for outstanding claims being 4 x lower than budget (9.4 per cent). As mentioned earlier, the major factor in this reduction was due to release of future liabilities following consecutive years of better than expected claims experience and improved agencies’ OH&S performance.

VarianceItem Actuals Budget $M %Assets 4,565.9 5,397.7 (831.8) -15.4%Liabilities 4,235.7 4,652.2 (416.5) -9.0%Net Equity 330.2 745.5 (415.3) -55.7%

0 .0

1 ,0 0 0 .0

2 ,0 0 0 .0

3 ,0 0 0 .0

4 ,0 0 0 .0

5 ,0 0 0 .0

6 ,0 0 0 .0

As s e ts L ia b il i tie s N e t E q u ity

M illion

B a la n c e Sh e e t

Actu a lsB u d g e t

Credit Card Certification

OFM has a Credit Card Policy and Procedures Statement which outlines requirements for the issue, use and administration of cards. These rules are consistent with Government policy as outlined in Treasurer’s Directions and Treasury Circulars. Staff can access the Statement from OFM’s intranet.

In accordance with Treasurer’s Direction 205.01, it is certified that credit card usage by officers of OFM has been in line with Government requirements.


Budget Review

Actual to 2008-09 Budget Forecast

2008 Actual

2009 Budget

$’000 $’000REVENUEPremiums 795,114 755,394Reinsurance & other recoveries 29,467 47,320Investment income (355,259) 365,008Grants from the NSW Government - 40,000Other 15 -

Total revenue 469,337 1,207,722

EXPENSESClaims 266,648 693,286Outward reinsurance 28,884 30,866Depreciation and Amortisation 1,066 1,134Finance costs 269,180 267,048Management Fees 83,566 102,275Other 38,307 39,755

Total Expenses 687,651 1,134,384

SURPLUS BEFORE PAYMENT TO THE CROWN ENTITY (218,314) 73,338

Payment to Crown Entity 300,000 0

NET DEFICIT FOR THE YEAR AFTER PAYMENT TO CROWN ENTITY (518,314) 73,338

The 2008-09 Budget estimates a return of surplus of $73.3 million.

Revenue

Total budget revenue will increase by $738.3 million which is primarily due to the forecast investment income of $365.0 million in 2008-09. It is assumed that the anticipated investment income will return to long term trends following major market volatility and fluctuations during the year. The forward estimates assume investment return will meet the long term trend of 7.2 per cent per annum.

Premiums will decrease by $39.7 million. Major reductions are in respect of public liability of Visiting Medical Officers pool and workers compensation liability (down $16.7 million) and hindsight premium payments (down $23 million).

Expenses

Total budget expenses will increase by $146.7 million net of the $300 million payment to the Crown Entity. This is primarily due to lower than


expected claims experiences for 2007/08 due to actuarial revaluations.

During 2007-08 actuarial valuation of outstanding claims liability has been favourable following better than expected claims experience which resulted in significant release in provisions. Particularly in workers compensation where there has been a drop in weekly benefits payments, while public liability has seen both lower large claim payments as well as the number of claims reported.

The 2008-09 budget of claims expense allowed for some growth in claims and does not include any forecast for major release of outstanding claims liability. The level of outstanding claims provision is subject to regular actuary review and assessment

with any potential savings to be taken up when it arises.

In accord with SICorp’s Net Assets Holding Level Policy, payment of $300 million was made to the Crown Entity during the year. No budget for further payment (or funding) to (or from) the Crown Entity in 2008-09 has been made. This will be dependent on SICorp’s financial result as at 31 December 2008.

The 2008-09 budget management fees are estimated to be higher than 2007-08 actual amount by $18.7 million. The budget amount is estimated through actuarial modelling and is impacted by the timing of incentive fee payments.

SECTION 4 - Financial Statement

Income Statement

Statement of Recognised Income and Expense

Balance Sheet

Cash Flow Statement

Notes to Financial Statement

Note 1 NSW Self Insurance Corporation InformationNote 2 Summary of Significant Accounting PoliciesNote 3 Premium RevenueNote 4 Reinsurance and Other Recoveries RevenueNote 5 Investment IncomeNote 6 Claims ExpensesNote 7 Payment to the Crown EntityNote 8 Other ExpensesNote 9 ReceivablesNote 10 Reinsurance and Other Recoveries ReceivablesNote 11 Derivative Financial Instruments

Note 12 Financial Assets at Fair ValueNote 13 Other AssetsNote 14 Property, Plant and EquipmentNote 15 IntangiblesNote 16 PayablesNote 17 Provision for Outstanding ClaimsNote 18 Provision for RestorationNote 19 Other LiabilitiesNote 20 EquityNote 21 Notes to the Cash Flow StatementNote 22 Income Statement of FundsNote 23 Balance Sheet for FundsNote 24 Financial InstrumentsNote 25 Commitments for ExpenditureNote 26 Contingent AssetsNote 27 Contingent LiabilitiesNote 28 Events After the Balance Sheet Date

3�Financial Statement for Year Ending 30 June 2008

Financial Statement for Year Ending 30 June 20083�

37Financial Statement for Year Ending 30 June 2008

Financial Statement for Year Ending 30 June 200838

Income Statement2008 2007

Notes $’000 $’000REVENUEPremiums 3, 22 795,114 820,103Reinsurance and Other Recoveries 4, 22 29,467 51,736Investment Income 5, 22 (355,259) 555,046Other 22 15 8

Total Revenue 469,337 1,426,893

EXPENSESClaims 6, 22 266,648 163,465Outward Reinsurance 22 28,884 29,944Depreciation and Amortisation 14, 15, 22 1,066 904Finance Costs 17, 22 269,180 271,158Management Fees 22 83,566 86, 573Other 8, 22 38,307 35,052

Total Expenses 687,651 587,096

SURPLUS BEFORE PAYMENT TO THE CROWN ENTITY (218,314) 839,797

Payment to the Crown Entity 7, 22 300,000 910,000

NET DEFICIT FOR THE YEAR AFTER PAYMENT TO CROWN ENTITY (518,314) (70,203)

Statement or Recognised Income and Expenses

2008 2007Notes $’000 $’000

TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY

- -

Net Deficit for the Year After payment to the Crown Entity (518,314) (70,203)

TOTAL INCOME AND EXPENSE RECOGNISED FOR THE YEAR (518,314) (70,203)


Balance Sheet

2008 2007Notes $’000 $’000

CURRENT ASSETSCash and Cash Equivalents 21, 23, 24 150,321 99,761Receivables 9, 23, 24 93,325 116,115Reinsurance and Other Recoveries Receivable 10, 23, 24 34,223 31,939Financial Assets at Fair Value 12, 23, 24 81,715 306,864Derivative Financial Instruments 11, 23, 24 3,168 4,537Other 13, 23 15 -Total Current Assets 362,767 559,216

NON-CURRENT ASSETSReinsurance and Other Recoveries Receivable 10, 23, 24 146,284 154,811Financial Assets at Fair Value 12, 23, 24 4,054,035 4,564,385Property, Plant and Equipment 14, 23 368 498Intangibles 15,23 2,432 3,016Other 13, 23 42 51Total Non-Current Assets 4,203,161 4,722,761

TOTAL ASSETS 4,565,928 5,281,977

CURRENT LIABILITIESPayables 16, 23, 24 120,452 123,696Provision for Outstanding Claims 17, 23 645,643 622,672Other 19, 23 8,019 3,331Total Current Liabilities 774,114 749,699

NON-CURRENT LIABILITIESProvision for Outstanding Claims 17, 23 3,461,524 3,683,677Provision for Restoration 18, 23 56 53Total Non-Current Liabilities 3,461,580 3,683,730

TOTAL LIABILITIES 4,235,694 4,433,429

NET ASSETS 330,234 848,548

EQUITYRetained Surplus 20, 23 330,234 848,548

330,234 848,548


Cash Flow Statement

2008 2007NOTES $’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

RECEIPTSPremiums Received 942,534 930,869Premiums - Hindsight Adjustment Received 99,813 32,288Investment Income 232,970 969,475Reinsurance and Other Recoveries 35,920 38,862GST Refunds 26,594 23,210Other 15 85Total Receipts 1,337,846 1,994,789

PAYMENTSClaims and Expenses Paid (786,111) (643,332)Premiums - Hindsight Adjustment Payments (139,008) (90,437)Management Fees Paid (91,924) (94,584)GST Paid (87,730) (86,577)Outward Reinsurance Expense (30,844) (31,257)Payment to the Crown Entity (300,000) (910,000)Total Payments (1,435,617) (1,856,187)

NET CASH PROVIDED BY OPERATING ACTIVITIES 21 (97,771) 138,602

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from Sale of Investments 948,747 2,023,264Purchases of Investments (800,064) (2,365,510)Purchase of Property, Plant and Equipment, and Intangibles (352) (1,391)

NET CASH (USED IN) / PROVIDED BY INVESTING ACTIVITIES 148,331 (343,637)

NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS 50,560 (205,035)

Cash and Cash Equivalents at the Beginning of Year 99,761 304,796

CASH AND CASH EQUIVALENTS AT THE END OF YEAR 21 150,321 99,761


Notes of the Financial Statement

1. NSW SELF INSURANCE CORPORATION INFORMATION

The NSW Self Insurance Corporation (SICorp) is a statutory body that largely provides self-insurance coverage for general government budget-dependent agencies. Its main business address is Level 17, 201 Elizabeth Street Sydney NSW 2000.

SICorp is a not-for-profit entity which includes all the assets, liabilities, rights and obligations of the: • NSW Treasury Managed Fund (TMF)• Pre-Managed Fund Reserve• Governmental Workers Compensation Account (GWC)• Transport Accidents Compensation Fund (TAC)

SICorp operates under the NSW Self Insurance Corporation Act 2004, the Net Assets Holding Level Policy (Note 7) and the Public Finance and Audit Act 1983. SICorp was previously the Insurance Ministerial Corporation, under section 24 of the Government Insurance Office (Privatisation) Act 1991.

The claims management arrangement of SICorp is shared between:• GIO General Limited (GIO)• Allianz Insurance Australia (Allianz) • Employers Mutual Limited (EML)

Current contract with the existing claims managers commenced at 1 July 2005 and is subject to public tender, which occur at least every five years.

The claim managers receive a management fee to administer the following funds:

NSW Treasury Managed Fund

The NSW Treasury Managed Fund (TMF) is SICorp’s main insurance scheme. It is a self-insurance scheme that protects the insurable assets and exposures of: • all public sector agencies financially dependent on the Consolidated Fund• all public hospitals • various statutory authorities

Pre-Managed Fund Reserve

The Pre-Managed Fund Reserve holds the reserves previously held in the Fire Risks Account, the Fidelity Fund, and the Public Liability Fund. It has been used to fund claims the NSW Government incurred before 1 July 1989 which the government previously met, in particular Government Workers Compensation (GWC) claims. These claims are now funded directly from the Consolidated Fund.

Pre-Managed Fund Reserve annual reporting accounts have been consolidated with the TMF from 2000-01.

Governmental Workers Compensation Account

The Governmental Workers Compensation Account (GWC) pays the outstanding workers compensation claims liabilities as at 30 June 1989 of the:• Consolidated Revenue Fund• Public Hospitals • RTA Managed Fund


From 1 July 1989, the TMF has handled workers compensation insurance for these agencies.

Transport Accidents Compensation Fund

The Transport Accidents Compensation Fund (TAC) pays for motor transport accident claims under the common law system which applied until 30 June 1987 and TransCover system claims costs from then until 30 June 1989. The Intermediate Claims provisions of the Motor Accidents Scheme retrospectively replaced TransCover.

The accounts are consolidated into SICorp’s Parent, the Crown Entity.

This financial report was authorised for issue by the Secretary of NSW Treasury on the date the accompanying statement by the Secretary was signed.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the:• Public Finance and Audit Act 1983• Public Finance & Audit Regulation 2005• Treasury Accounting Policy Statements

The report also complies with applicable Australian Accounting Standards which include Australian Accounting Interpretations except for AASB 1023 General Insurance Contracts.

The financial report has been prepared on a historical cost basis, except for:• Derivative financial instruments• Financial assets designated as fair value through profit and loss• Provision for outstanding claims

These have been measured at fair value.

The financial report is presented in Australian dollars and all amounts are rounded to the nearest thousand dollars ($’000).

Use of Estimates and Judgements

The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances. Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made.

Classification and Valuation of InvestmentsSICorp classifies its investments as fair value through profit and loss. The fair value has been determined by reference to the underlying value provided by the Portfolio manager.


Valuation of Derivative Financial InstrumentsThe fair values of derivatives are determined by reference to the market value for similar instruments.

Where an active market exists, fair values are determined by reference to the specific market quoted prices/yields at the year end. If no active market exists, judgement is used to select the valuation technique which best estimates fair value by discounting the expected future cash flows arising from the securities to their present value using market yields and margins appropriate to the securities. These margins take into account credit quality and liquidity of the securities.

Provision for Outstanding ClaimsThe provision for outstanding claims is determined by the independent actuary, PricewaterhouseCoopers, in consultation with the claims managers for NSW Treasury Managed Fund, Transport Accident Compensation Fund and Governmental Workers Compensation Account. It is measured as the best estimate of the expected future payments required to settle the present obligation at the reporting date.

The expected future payments are estimated on the basis of the ultimate cost of the settling of claims, which is affected by factors arising during the period to settlement such as normal inflation and “superimposed inflation”.

Superimposed inflation refers to factors such as trends in court awards, for example increases in the level and period of compensation for injury. The expected future payments are then discounted to a present value at the reporting date using discount rates based on investment opportunities available on the amounts of funds sufficient to meet claims as they become payable. The details of rates applied are included in Note 17.

The outstanding claims liability of Pre Managed Fund Reserve (part of TMF) is determined from estimates provided by the member agencies. The list of claims estimates provided by the agencies is vetted by the NSW Treasury Managed Fund Manager and approved by the NSW Treasury.

Statement of Compliance

The financial report complies with applicable Australian Accounting Standards which include Australian Accounting Interpretations except for AASB 1023 General Insurance Contracts.

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted for the annual reporting period ended 30 June 2008. These are listed as follows:

• AASB 3, AASB 127 and AASB 2008-3 (Mar 2008) regarding business combinations and consolidations (1 Jul 2009)

• AASB 8 and AASB 2007-3 (Feb 2007) regarding operating segments (1 Jan 2009)

• AASB 101 and AASB 2007-8 (Sep 2007) regarding presentation of financial statements (1 Jan 2009)

• AASB 123 and AASB 2007-6 (Jun 2007) regarding borrowing costs (1 Jan 2009)

• AASB 1004 (Dec 2007) regarding contributions (1 Jul 2008)

• AASB 1049 (Oct 2007) regarding the whole of government and general government sector financial reporting (1 Jul 2008)

• AASB 1050 (Dec 2007) regarding administered items (1 Jul 2008)


• AASB 1052 (Dec) regarding disaggregated disclosures only (1 Jul 2008)

• AASB 2007-9 (Dec 2007) regarding amendments arising from the review of AASs 27, 29 and 31 (1 Jul 2008)

• AASB 2008-1 (Feb 2008) regarding vesting conditions (1 Jan 2009)

• AASB 2008-2 (Mar 2008) regarding puttable financial instruments (1 Jan 2009)

• Interpretation 4 (Feb 2007) regarding determining whether an arrangement contains a lease (1 Jan 2008)

• Interpretation 12 (Jun 2007) and AASB 2007-2 regarding service concession arrangements (1 Jan 2008)

• Interpretation 14 (Aug 2007) regarding the limit on a defined benefit asset (1 Jan 2008)

• Interpretation 129 (Feb 2007) regarding service concession disclosures (1 Jan 2008)

• Interpretation 1038 (Dec 2007) regarding contributions by owners (1 Jul 2008)

It is considered that the impact of these new Standards and Interpretations in future periods will have no material impact on the financial statements of SICorp.

Adoption of New Accounting Standard

SICorp has adopted AASB 7 Financial Instruments; Disclosures, and all consequential amendments which became applicable on 1 January 2007. The adoption of this standard has only affected the disclosure in these financial statements. There has been no affect on profit and loss or the financial position of the entity.

Comparative Figures

Comparative figures have been reclassified and repositioned in the financial statements, where necessary, to conform to the basis of presentation and classification used in the current year.

Reclassifications made to comparative figures include:

Cash Flow Statement• A reclassification of $29.2 million from premium hindsight received to premiums received in operating activities.

REVENUE

Revenue is recognised as probable economic benefits to SICorp that can be reliably measured. The following criteria are used to identify revenue:

Premium Revenue

Premium revenue is the cost to member agencies of insurance cover from 1 July each year.

Premiums are recognised to income over the period of the insured risk.


Reinsurance and Other Recoveries Revenue

Reinsurance recoveries are recognised as revenue for claims incurred. Other recoveries include recoveries of claims paid under:• sharing agreements• third party recoveries• salvage and subrogation

Investment Income

Investment income includes interest income and net gains or losses from changes in the fair value of investments.

Interest revenue is recognised as interest accrues.

EXPENSES

Outwards Reinsurance Expense

Premiums ceded to re-insurers are recognised as an expense in line with the indemnity period of the corresponding reinsurance contract.

Claims Expenses

Claims expenses include:• cash settlement of claims• movements in outstanding provisions

Finance Costs

Finance costs include the unwinding of discounts for the provision of outstanding claims and restoration costs.

These are recognised as an expense when incurred.

Depreciation of Property, Plant and Equipment

Depreciation is calculated on a straight-line basis over the estimated useful life of the specific asset.

The useful lives of depreciable asset categories are:• office equipment: 7 years• furniture and fittings: 5 to 10 years• computer hardware: 4 years

Amortisation of Intangible Assets

Computer software costs are amortised over 5 years.

Payment to the Crown Entity

Pursuant to the Net Assets Holding Level Policy, SICorp will make payments to the Crown Entity when it has surplus assets over and above the required level. Further information on the policy is included in Note 7.

Financial Statement for Year Ending 30 June 20084�

The payments are recognised as expenses when they are paid or payable.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

SICorp as a lesseeThe operating lease relates to the rental of office space, the principal business address of SICorp. It is a non-cancellable lease with a term of six years and an option to extend for a further four years. A rental review is taken biannually to effective market prices.

On expiration of the lease, the rental premise is to be returned to its original condition. A provision for restoration has been taken up.

The operating lease payments are recognised as an expense in the Income Statement on a straight-line basis over the lease term.

Income Tax

Income from the funds of SICorp are exempt from income tax under S23(d) of the Income Tax Assessment Act 1936.

ASSETS

Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprise:• deposit held at call with banks • investments in NSW Treasury Corporation Hour-Glass Cash Facility• investments in money market instruments

The Cash Flow Statement shows these cash and cash equivalents net of outstanding bank overdraft(s).

Investments

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. SICorp classifies its financial assets after initial recognition and, when allowed and appropriate, it re-evaluates this at each year-end.

Financial assets at fair valueFinancial assets are designated at fair value through profit and loss as they are managed and their performance is evaluated on a fair value basis. Gains and losses are recognised in the Income Statement.

Investments comprise of NSW Treasury Corporation (TCorp) Managed Bond portfolio and Hour-Glass investment facilities are classified as fair value through profit and loss.


Derivative Financial InstrumentsSICorp uses derivatives such as interest rate swaps to reduce the risks of interest rate fluctuations. These instruments are initially recognised at fair value at the date on which the derivative contract is entered into and are subsequently remeasured to fair value.

Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Fair value for derivatives are shown after net-off of transactions with the same counter-party.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the Income Statement.

Fair value of interest rate contracts are calculated by reference to market value for similar contracts.

Receivables

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets, for example taxes and premiums, are short-term to be carried at original invoice amount as the effect of discounting is immaterial.

The collection of trade receivables is reviewed on an ongoing basis. An allowance for impairment is established when there is objective evidence that not all amounts due will be collectable. Bad debts are written off as incurred.

Reinsurance and Other Recoveries Receivable

Receivables from reinsurance and other recoveries are actuarially assessed.

When it becomes apparent that a recovery may not be received with virtual certainty, these recoveries are deducted from the recoveries receivable estimate.

The amount of reinsurance and other recoveries receivables is equal to gross case estimated costs plus gross payments to date less the retention limit less reinsurance recoveries received to date. The measurement of these receivables is affected by factors such as normal inflation and the discount rate used for discounting of future expected receipts. The rates applied are consistent with those used in the valuation of provisions for outstanding claims (see Note 17).

An explicit allowance has been made in respect of Liability claims arising in respect of Hepatitis C. As recoveries from Hepatitis C claims are funded by the Commonwealth, default risk is considered negligible. In relation to other recoveries, around half of these are recoverable from the Motor Accidents Authority, for which default risk is also negligible.

There has not been any key assumption made around the amounts recoverable that would have a significant risk of causing a material adjustment to the carrying amount of these assets within the next annual reporting period.

Property, Plant and Equipment

Office furniture, equipment and computer hardware are recorded at cost plus any incidental acquisition costs. All items are carried at cost less accumulated depreciation, as surrogate for fair value.

The depreciation expense on property, plant and equipment are recognised in the depreciation and amortisation line of the Income Statement.


No revaluation is undertaken on these assets as the difference between fair value and carrying value is immaterial.

Intangible assets

Intangible assets include capitalised expenditures for the Data Warehouse and computer softwares.

Intangibles are initially measured at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation.

The amortisation expense on intangible assets is recognised in profit or loss in the depreciation and amortisation line of the Income Statement.

Impairment of Assets

As a not-for-profit entity with no cash generating units, SICorp is effectively exempt from AASB 136 Impairment of Assets and impairment testing. AASB 136 defines recoverable amount as the higher of fair value less costs to sell and depreciated replacement cost. This means that, for an asset already measured at fair value, impairment can only arise if selling costs are material. Selling costs are regarded as immaterial.

LIABILITIES

Provisions

Provisions are recognised when SICorp has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The liability for claims includes:• claims incurred but not yet paid• incurred but not yet reported

When it is virtually certain that some or all of a provision will be reimbursed, as in an insurance contract, the reimbursement is recognised as a separate asset.

Where there is a material effect due to the time value of money, a provision is discounted. The increase in the provision resulting from the passage of time is recognised in finance costs.

Under Australian Equivalents to International Financial Reporting Standards, the Pre-Managed Fund Reserve, the GWC and the TAC are required to adopt AASB 137 Provisions, Contingent Liabilities and Contingent Assets. SICorp’s main insurance scheme, the TMF, is required to comply with AASB 1023 General Insurance Contracts.

However, at the General Government and Total State Sector reporting levels SICorp is considered a public sector self insurance scheme resulting in the adoption of AASB 137 for all of the Corporation’s activities. To provide enhanced consistency, reliability, relevance and comparability of the financial information for users of the financial statements, AASB 137 is applied across all SICorp’s activities including the TMF.

Trade and other payables

Trade and other payables are carried at costs and are liabilities for goods and services provided, but not paid for prior to the end of the financial year. This occurs when SICorp becomes obliged to make future


payments in respect of goods and services, even if it has not been billed for them.

Like receivables, these are short-term and are carried at original invoice amount as the effect of discounting is immaterial.

Goods and Service Taxes

Revenue, expenses and assets are recognised net of Goods and Services Tax (GST), except:• where the GST is either part of the cost of acquiring an asset, or part of an item of expense not recoverable from the Australian Tax Office• for receivables and payables which are stated with the amount of GST included

The net amount of GST recoverable from or payable to the taxation authority is included as part of receivables or payables.

Cash flows are included in the Cash Flow Statement on a gross basis. The GST recoverable or payable on cash flows from investing and financing activities are classified as operating cash flows.

3. PREMIUM REVENUE2008 2007

$’000 $’000

Tariff Premium 803,015 791,035Hindsight Adjustments (59,287) (26,580)Visiting Medical Officers (VMO) 51,338 55,606Medically Supervised Injecting Centre (MSIC) 48 42

795,114 820,103

Motor vehicle hindsight adjustment for 2005/06, workers compensation final hindsight adjustments for 2001/02 and interim hindsight adjustments for 2003/04 were paid in 2007/08.

Payments of the workers compensation final hindsight adjustments for 2002/03 and interim hindsight adjustments for 2004/05 will be paid in 2008/09.

4. REINSURANCE & OTHER RECOVERIES REVENUE

Recoveries Revenue 35,552 38,700Movement in Outstanding Recoveries * (6,085) 13,036

29,467 51,736

* Movement in outstanding recoveries represent the increase / (decrease) in the actuarially assessed level of reinsurance and other recoveries receivable at reporting date.

The movement in outstanding recoveries for 2008 represents discounted expected future recoveries at 30 June 2008 ($180.5 million) less closing balance at 30 June 2007 ($186.6 million). Refer to Note 10 for further details.

Financial Statement for Year Ending 30 June 2008�0

5. INVESTMENT INCOME2008 2007

$’000 $’000

Bank Interest 3,931 4,041Revenue from Financial Assets Held at Bond Portfolio 141,512 151,263 Hour-Glass Facility (458,071) 453,317Gains / (Losses) from Financial Assets Held at Fair Value Derivative Financial Instruments - Held for Trading (9,445) (9,249) Bond Portfolio - Designated as at Fair Value (33,186) (44,326)

(355,259) 555,046

6. CLAIMS EXPENSES

Claims Paid 735,008 604,335Movement in Outstanding Claims1 (468,360) (440,870)

266,648 163,465

*. Movement in outstanding claims represent the increase / (decrease) in provision for outstanding claims liabilities excluding the increase in provisions due to the unwinding of discounts during the year. The increase in the carrying amount of a provision due to the passage of time is recognised as a finance cost.

The movement in outstanding claims for 2008 represents outstanding claims liabilities at 30 June 2008 ($4,107.1 million) less closing balance at 30 June 2007 ($4,306.3 million) less finance cost for the year ($269.2 million). Refer to Note 17 for further details.

7. PAYMENT TO THE CROWN ENTITY

Payment to the Crown Entity 300,000 910,000300,000 910,000

Pursuant to SICorp’s Net Assets Holding Level Policy, the Corporation will make payments to the Crown Entity when it has surplus assets over and above the required level.

The Policy, established in March 2006, takes into consideration the following:

• the probability of poor investment returns for the year(s), and/or• the possibility of a deterioration in claims experience, and/or• the impact of a major claim, either not covered by reinsurance protection or exhausting the reinsured retention level

The Policy dictates that the target surplus assets held for SICorp to be the sum of 10 per cent of outstanding claims liabilities of the TMF plus the amount absorbed by the fund of any one claim exceeding the reinsurance retention level. The adequacy of the fund’s net assets level is reviewed annually based on the financial results as at 31 December.

�1Financial Statement for Year Ending 30 June 2008

8. OTHER EXPENSES

2008 2007$’000 $’000

Levies Paid to: Dust Diseases 4,352 4,074 Work Cover Authority of NSW 19,115 18,329Investment Management Fees 1,946 2,421Risk Management Fees 1,624 1,560Actuarial Expenses PricewaterhouseCoopers 4,289 3,546 Taylor Fry 324 102Storage Cost 384 266Maintenance 1,671 872Bank Charges 33 21Audit Fees 171 153Legal Expenses - 7Consultancy 245 258Reinsurer Administration Fees 1,103 900Personnel Services Fees 1,809 1,899Operating Lease Rental Expenses 316 341Recoveries Written-Off 130 -Other 795 303

38,307 35,052

9. RECEIVABLES

Current

Premiums 87,675 116,012Other 5,650 103

93,325 116,115

GST and other receivables are non-interest bearing and are generally on 30 days term.


10. REINSURANCE AND OTHER RECOVERIES RECEIVABLE

2008 2007$’000 $’000

Expected Future Recoveries (Undiscounted) 264,599 293,215Discount to Present Value (84,058) (106,589)

180,541 186,626

Outstanding Reinsurance and other Recoveries on Paid Claims (34) 124180,507 186,750

Current 34,223 31,939Non-Current 146,284 154,811

180,507 186,750

11. DERIVATIVE FINANCIAL INSTRUMENTS

Current AssetsInterest Rate Futures 3,168 4,537Amount receivable under derivative financial instruments 3,168 4,537

Interest rate swap contracts were used by SICorp to naturally hedge exposure to fluctuations in interest rates affecting investment returns.

The NSW Treasury Corporation (TCorp) has been appointed to manage SICorp’s investments. It is authorised to invest in derivative financial instruments under authorised and clearly defined limits. Derivative contracts are not used for speculative purposes.

TCorp may use the following derivative financial instruments:• Exchange traded interest rate futures contracts• Exchange traded interest rate options• Interest rate swaps• Currency and basis swaps

At 30 June, the nominal principal amounts and period of expiry of the derivatives are as follows:

Less than one year 3,168 4,5373,168 4,537


12. FINANCIAL ASSETS AT FAIR VALUE

2008 2007$’000 $’000

CurrentBond Portfolio 81,715 306,864

81,715 306,864

Non-Current:Hour-Glass Investments Australian Shares 677,646 798,262 Indexed Australian Shares 188,593 206,635 International Shares 754,062 736,184 Indexed International Shares 237,636 260,193 Listed Property 199,894 209,700 International Bonds 393,948 313,163 Medium-Term Growth 96,476 110,477 Long-Term Growth 95,573 110,061Bond Portfolio 1,410,207 1,819,710

4,054,035 4,564,3854,135,750 4,871,249

At 30 June 2008, total investments of SICorp are financial assets designated at fair value through profit and loss.

13. OTHER ASSETS

CurrentPrepayments 15 -

15 -Non-CurrentDeferred Restoration Costs 42 51

42 51


14. PROPERTY, PLANT AND EQUIPMENT

2008 2007$’000 $’000

Computer HardwareCost 688 664Accumulated Depreciation (438) (271)Net Computer Hardware 250 393Office EquipmentCost 56 27Accumulated Depreciation (13) (8)Net Office Equipment 43 19Furniture & FittingCost 107 107Accumulated Depreciation (32) (21)Net Furniture & Fittings 75 86

Total Property, Plant & EquipmentCost 851 798Accumulated Depreciation (483) (300)Net Property, Plant & Equipment 368 498

ReconciliationsReconciliations of Carrying Amount

Computer HardwareNet Carrying Amount at the Beginning of Year 393 371Additions 24 170Depreciation Expense (167) (148)Balance at Year End 250 393Office EquipmentNet Carrying Amount at the Beginning of Year 19 23Additions 29 -Depreciation Expense (5) (4)Balance at Year End 43 19Furniture & fittingsNet Carrying Amount at the Beginning of Year 86 97Depreciation Expense (11) (11)Balance at Year End 75 86Total Property, Plant and EquipmentNet carrying amount at the Beginning of the Year 498 491Additions 53 170Depreciation Expense (183) (163) Balance at Year End 368 498

��Financial Statement for Year Ending 30 June 2008

15. INTANGIBLES

2008 2007$’000 $’000

Computer SoftwareCost 4,544 4,245Accumulated Amortisation (2,112) (1,229)Net Computer Software 2,432 3,016

ReconciliationReconciliations of Carrying Amount

Computer SoftwareNet Carrying Amount at the Beginning of Year 3,016 2,536Additions 299 1,221Amortisation (883) (741)Balance at Year End 2,432 3,016

16. PAYABLES

GST Payable 76,671 80,866Management Fees Payable 35,160 31,294Others 8,621 11,536

120,452 123,696

Payables are non-interest bearing and are generally on 30 days term.

If trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a statement is received.

Treasurer’s Direction 219.01 allows the Minister to award interest for late payment. No interest was awarded during the year for late payment.

Financial Statement for Year Ending 30 June 2008��

17. PROVISION FOR OUTSTANDING CLAIMS

TMF GWC TAC 2008 2007Total

$’000 $’000 $’000 $’000 $’000

Balance at the Beginning of Year 4,062,744 67,108 176,497 4,306,349 4,476,062

Additions 685,103 - - 685,103 702,213Payments (716,987) (4,760) (13,261) (735,008) (604,335)Actuarial (Gain)/ Loss (421,354) (1,261) 4,158 (418,457) (538,749)Unwinding of Discounts 253,644 4,117 11,419 269,180 271,158Balance at the End of Year 3,863,150 65,204 178,813 4,107,167 4,306,349

Current 630,917 4,869 9,857 645,643 622,672Non-Current 3,232,233 60,335 168,956 3,461,524 3,683,677

3,863,150 65,204 178,813 4,107,167 4,306,349

(a) The weighted average expected term to settlement from the balance date of the outstanding claims is estimated to be 6.17 years for TMF (2007: 6.81 years), 9.32 years for GWC (2007: 9.66 years) and 17.93 years for TAC Fund (2007: 17.91 years).

(b) The following average inflation rates and discount rates were used in measuring the liability for outstanding claims:

TMF GWC TAC2008 2007 2008 2007 2008 2007

% % % % % %Not later than one yearInflation Rate 2.8 - 4.5 2.8 - 4.5 4.5 4.5 4.5 4.5Discount Rate 7.0 6.8 7.0 6.8 7.0 6.8Superimposed Inflation* 0 - 10.0 0 - 10.0 0 - 3.0 0 - 3.0 0 - 2.5 0 - 2.5

Later than one yearInflation Rate 2.5 - 4.0 2.5 - 4.0 4.5 4.5 4.5 4.5Discount Rate 7.0 6.8 7.0 6.8 7.0 6.8Superimposed Inflation* 0 - 10.0 0 - 10.0 0 - 3.0 0 - 3.0 0 - 2.5 0 - 2.5

* Dependent on payment type.


18. PROVISION FOR RESTORATION

2008 2007$’000 $’000

Balance at the Beginning of Year 53 119

Reversal of Unused Provisions - (67)Unwinding of Discounts 3 1Balance at the End of Year 56 53

19. OTHER LIABILITIES

Premium Received in Advance 8,019 3,331

20. EQUITY

Retained Surplus

Balance at the Beginning of Year 848,548 918,751

Current Year Deficit (518,314) (70,203)

Balance at the End of Year 330,234 848,548


21. NOTES TO THE CASH FLOW STATEMENT

Reconciliation of Cash and Cash Equivalents

Cash and Cash Equivalents at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the Balance Sheet as follows:

2008 2007$’000 $’000

Cash and Cash Equivalents Short Term Money Market Investments 48,342 43,672 Cash Held at Other Financial Institutions 101,979 56,089

150,321 99,761

Included in the cash and cash equivalents is a restricted amount $1.6 million (2007:$1.8 million) relating to funds being held on behalf of other parties.

Reconciliation of Net Cash Provided by Operating Activities to Net Deficit

Net Deficit for the Year (518,314) (70,203)

Adjustment for: Depreciation and Amortisation 1,066 904 Unrealised Loss / (Gain) in Investments 588,185 414,410 Unwinding of Discounts 269,180 271,158 Actuarial Gains (418,457) (538,749) Increase in Outstanding Claims (49,905) 97,878 Decrease in Unearned Premiums (3,244) 6,647 Increase in Payables 4,688 965 Increase in Other Liabilities 3 (66) (Increase) / Decrease in Receivables 22,790 (31,330) Increase in Reinsurance and Other Recoveries Receivable 6,243 (13,080) Decrease in Other Assets (6) 68Net Cash Provided by operating activities (97,771) 138,602


22. INCOME STATEMENT OF FUNDS

TMF GWC TAC 2008 2007Total Total

$’000 $’000 $’000 $’000 $’000RevenuePremiums 795,114 - - 795,114 820,103Reinsurance and Other Recoveries 27,418 1,394 655 29,467 51,736Investment Income (343,847) (3,362) (8,050) (355,259) 555,046Other 15 - - 15 8

Total Revenue 478,700 (1,968) (7,395) 469,337 1,426,893

ExpensesClaims 263,751 (1,261) 4,158 266,648 163,465Outwards Reinsurance 28,884 - - 28,884 29,944Depreciation and Amortisation 1,066 - - 1,066 904Finance Costs 253,644 4,117 11,419 269,180 271,158Management Fees 83,566 - - 83,566 86,573Other 38,051 52 204 38,307 35,052

Total Expenses 668,962 2,908 15,781 687,651 587,096

SURPLUS/ (DEFICIT) BEFORE PAYMENT TO THE CROWN ENTITY (190,262) (4,876) (23,176) (218,314) 839,797

Payment to the Crown Entity 300,00 - - 300,000 910,000

NET DEFICIT FOR THE YEAR AFTER PAYMENT TO CROWN ENTITY (490,262) (4,876) (23,176) (518,314) (70,203)




23. BALANCE SHEET FOR FUNDS

TMF GWC TAC 2008 2007Total Total$’000 $’000

CURRENT ASSETSCash and Cash Equivalents 143,216 3,704 3,401 150,321 99,761Receivables 93,325 - - 93,325 116,115Reinsurance and Other Recoveries Receivable 33,764 394 65 34,223 31,939Financial Assets at Fair Value 81,715 - - 81,715 306,864Derivative Financial Instruments 3,168 - - 3,168 4,537Other 15 - - 15 -Total Current Assets 355,203 4,098 3,466 362,767 559,216

NON-CURRENT ASSETSReinsurance and Other Recoveries Receivable 140,868 4,351 1,065 146,284 154,811Financial Assets at Fair Value 3,861,986 58,464 133,585 4,054,035 4,564,385Property, Plant and Equipment 368 - - 368 498Intangibles 2,432 - - 2,432 3,016Other 42 - - 42 51Total Non-Current Assets 4,005,696 62,815 134,650 4,203,161 4,722,761

TOTAL ASSETS 4,360,899 66,913 138,116 4,565,928 5,281,977

CURRENT LIABILITIESPayables 120,297 66 89 120,452 123,696Provision for Outstanding Claims 630,917 4,869 9,857 645,643 622,672Other 8,019 - - 8,019 3,331Total Current Liabilities 759,233 4,935 9,946 774,114 749,699

NON- CURRENT LIABILITIESProvision for Outstanding Claims 3,232,233 60,335 168,956 3,461,524 3,683,677Provision for Restoration 56 - - 56 53Total Non-Current Liabilities 3,232,289 60,335 168,956 3,461,580 3,683,730

TOTAL LIABILITIES 3,991,522 65,270 178,902 4,235,694 4,433,429

NET ASSETS 369,377 1,643 (40,786) 330,234 848,458

EQUITYRetained Surplus/ (Deficit) 369,377 1,643 (40,786) 330,234 848,548


24. FINANCIAL INSTRUMENTS

SICorp’s principal financial instruments are outlined below. These financial instruments arise directly from SICorp’s operations or are required to finance those operations. SICorp does not enter into financial instruments, including derivative financial instruments, for speculative purposes.

SICorp’s main risks arising from financial instruments are outlined below, together with SICorp’s objectives, policies and processes for measuring and managing risk. Further quantitative and qualitative disclosures are included through this financial report.

The Audit and Risk Committee has overall responsibility for the establishment and oversight of risk management, and reviews and sets policies for managing each of these risks. Risk management policies are in place to establish frameworks and processes that identify and analyse the risks faced by SICorp, set risk limits and controls, and monitor risks. Compliance with policies is reviewed by the Audit and Risk Committee on an ongoing basis.

The main purpose of these financial instruments is to derive income and investment gains which are used to fund insurance liabilities.

Note 2 details the key accounting policies and methods which include the recognition criteria, the basis of measurement and the income and expenses recognition for each class of financial instrument.

Financial Instrument CategoriesNote Category Carrying Amount

2008 2007$’000 $’000

Financial Assets Cash and Cash Equivalents 21 N/A 150,321 99,761 Financial Assets 12 At fair value through profit or loss

(designated as such upon initial recognition) 4,135,750 4,871,249

Derivative 11 At fair value through profit or loss (classified as held for trading) 3,168 4,537

Receivables* 9,10 Receivables (measured at cost) 273,832 302,865Financial Liabilities Payables 16 Payables (measured at cost) 43,066 42,065

* Excludes statutory receivables and prepayments.

Risk Management

The activities of SICorp expose it to a variety of financial risks. These are: • Market risks i. interest rate risk ii. currency risk iii. other price risk• Credit risk • Liquidity risk


SICorp contracts the NSW Treasury Corporation (TCorp), the State’s central financing authority which has recognised expertise in the management of financial risks, to advise on, and actively manage these risks in line with the Memorandum of Understanding (MoU) between it and SICorp. TCorp actively manages and reports on the risks associated with the holding of financial instruments.

The MoU are updated annually to include changes in market conditions and/or management’s direction and clearly set out investment management objectives, restrictions, and establish performance benchmarks. The MoU are authorised and approved by the Executive of the NSW Treasury.

Proposed changes to the MoU must go through a consultative process within the forum of the Crown Debt and Asset Management Committees. The Crown Debt and the Crown Asset Management Committees, which were established separately, exist to monitor the performance and management of the Crown Entity’s debt and asset portfolios (which include SICorp’s). Members of the Committees include representatives from both TCorp and the NSW Treasury. The NSW Treasury’s representatives on these committees include staff that are qualified and experienced in corporate finance.

TCorp manages and monitors the financial risks within the boundaries of its established Board policies, legislative requirements, management guidelines and MoU. TCorp’s operational risks are mitigated through:• comprehensive and detailed risk management policies• detailed controls over the security, integrity and accuracy of all key systems• clear and appropriate reporting lines• qualified and experienced personnel• a Risk Management & Compliance function• regular internal audits

Market Risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. SICorp’s exposures to market risk are primarily through interest rate risks on investments in the TCorp Bond Portfolio and other price risks associated with the movement in the unit price of the Hour-Glass Investment facilities.

The effects on SICorp’s operating result due to reasonably possible changes in risk variables are outlined in the information below, for interest rate risk and other price risk. A reasonably possible change in each risk variable has been determined after taking into account the economic environment in which SICorp operates and the time frame for the assessment (i.e. until the end of the next annual reporting period). The sensitivity analysis is based on risk exposures in existence at the balance sheet date. The analysis is performed on the same basis for 2007. The analysis assumes that all other variables remain constant.

• Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Exposure to interest rate risk arises primarily through SICorp’s investments in the TCorp Bond Portfolio. TCorp manages the portfolio to agreed benchmarks to minimise the fair value interest rate risk. SICorp does not account for any fixed rate financial instruments as available for sale. Therefore for these financial instruments a change in interest rates would not affect SICorp’s equity.

The following table provides the sensitivity analysis of interest rate risk affecting applicable financial assets on the operating result and equity of SICorp. A reasonably possible change of +/- 1% is used, consistent with current trends in interest rates. The basis will be reviewed annually and amended where there is a structural change in the level of interest rate volatility.


$’000Carrying Amount

-1% +1%

Profit Equity Profit Equity2008 Cash and Cash Equivalents* 101,979 (1,020) (1,020) 1,020 1,020 Bond Portfolio 1,522,665 58,600 58,600 (58,600) (58,600)2007 Cash and Cash Equivalents* 56,089 (561) (561) 561 561 Bond Portfolio 2,136,270 83,600 83,600 (83,600) (83,600)

*. Excludes the cash and cash equivalents which are in the Hour-Glass and Bond Portfolio. Cash and cash equivalents of the Bond Portfolio is included in the Bond Portfolio line (above). Cash and cash equivalents of the Hour-Glass investment facilities is subject to the overall price risks of the Hour-Glass facilities. Refer to the section on Other Price Risk.

• Currency RiskSICorp has some foreign currency risk exposure from its investments in the TCorp Bond Portfolio. During the year, some investments in the Bond Portfolio (for example, derivative instruments) may be denominated in currencies other than the Australian Dollars. The agreement between SICorp and TCorp requires the manager to effectively hedge that currency exposure fully as and when it arises. TCorp fully hedges all foreign currency exposure for international fixed interest and listed property unit trust investments and foreign currency-denominated bond investments.

As at 30 June 2008, SICorp has no transactional or structural currency exposures (2007: $Nil).

• Other Price RiskExposure to ‘other price risk’ primarily arises through the investment in the TCorp Hour Glass Investment facilities which are held for strategic rather than trading purposes. SICorp has no direct equity investments.

SICorp holds units in the following Hour-Glass investment facilities:

Facility Investment Sectors Investment Horizon

2008$’000

2007$’000

Treasury Managed Fund Facility

Cash, money market instruments, International bonds, listed property, Australian & International shares

Long Term 2,472,548 2,562,651

Medium Term Growth Facility

Cash, money market instruments, Australian & International bonds, listed property, Australian & International shares

4 years to 7 years 96,476 110,477

Long Term Growth Facility

Cash, money market instruments, Australian & International bonds, listed property, Australian & International shares

7 years and over 95,573 110,061


The unit price of each facility is equal to the total fair value of the net assets held by the facility divided by the total number of units on issue for the facility. Unit prices are calculated and published daily.

TCorp as trustee for each of the above facilities is required to act in the best interest of the unitholders and to administer the trusts in accordance with the trust deeds. As trustee, TCorp has appointed external managers to manage the performance and risks of each facility in accordance with a mandate agreed by the parties.

Since April 2007, TCorp has also acted as manager for the Cash Facility. A significant portion of the administration of the facilities is outsourced to an external custodian.

Investments in the Hour-Glass facilities limit the SICorp’s exposure to risk, as this allows diversification across a pool of funds, with different investment horizons and a mix of investments.

The TCorp Hour-Glass investment facilities are designated at fair value through profit or loss and therefore any change in unit price impacts directly on profit (rather than equity). TCorp provides sensitivity analysis information for each of the facilities using historically based volatility information collected over a ten year period, quoted at two standard deviations (i.e. 95% probability). A reasonably possible change is based on the percentage change in unit price multiplied by the redemption price as at 30 June each year for each facility.

Impact on Surplus / (Deficit)Change in Unit Price

2008$,000

2007$,000

Treasury Managed Fund Facility +/- 17.5% 432,696 448,464

Medium Term Growth Facility +/- 7.5% 7,236 8,286

Long Term Growth Facility +/- 15.0% 14,336 16,509

SICorp has no exposure to commodity price risk.

Credit Risk

Credit risk arises from the financial assets of SICorp, which comprise cash and cash equivalents, receivables, financial assets at fair value and derivative instruments. SICorp’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments at balance date.

Cash and Cash Equivalents

Cash comprises cash investment in TCorp Hour-Glass cash facility and bank balances with other financial institutions. Interest is earned on daily bank balances.


Receivables

Receivables include trade debtors, and reinsurance and other recoveries receivable.

• Trade Debtors All trade debtors are recognised as amounts receivable at balance date. The collection of trade debtors is reviewed on an ongoing basis. Procedures as established in the Treasurer’s Directions are followed to recover outstanding amounts, including letters of demand. Debts which are known to be uncollectible are written off. An allowance for impairment is raised when there is objective evidence that the entity will not be able to collect all amounts due. No interest is earned on trade debtors. The average credit period on sales, unless agreed, is 30 days.

• Reinsurance and Other Recoveries Receivable Receivables from reinsurance and other recoveries are actuarially assessed. When it becomes apparent that a recovery may not be received with virtual certainty, these recoveries are deducted from the recoveries receivable estimate. There is no allowance for impairment for this type of receivables.

SICorp does not receive any collateral for receivables.

The financial assets that are past due or considered impaired are included in the table below

Total$’000

Past Due but Not Impaired ConsideredImpaired

$’000< 3 months

overdue3 - 6 months

overdue > 6 months

overdue2008 Receivables 4,108 3,053 - 1,055 -2007 Receivables 30,508 29,452 - 1,056 -

The ageing analysis excludes statutory receivables, as these are not within the scope of AASB 7.

Financial Assets at Fair Value

Financial assets at fair value include investments in TCorp’s Hour-Glass facilities and the managed assets portfolio. The investments within the Hour-Glass facilities are unit holdings, and as such, do not give rise to credit risk. Credit risk within the Hour-Glass facilities is managed by ensuring there is a wide spread of risks, achieved by engaging a spread of funds managers in a specific asset sector. TCorp, as trustee, contracts with these managers and requires in their mandates a series of controls over the concentration and credit quality of assets.

Financial Statement for Year Ending 30 June 2008��

Credit risk applicable to investments in TCorp’s managed assets portfolio as well as receivables are detailed in the tables below.

Concentration of Credit Risk

AAA AA+ AA AA- A+ A Other TotalRatings

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’0002008 Receivables 5,468 - - - - 144 268,220 273,832 Bond Portfolio 1,305,402 101,400 67,500 3,900 11,400 3,200 29,863 1,522,6652007 Receivables - - - - 138 784 301,943 302,865 Bond Portfolio 1,357,038 80,500 575,800 94,400 23,700 4,832 - 2,136,270

By classification of counterparty Governments Banks Others Total$’000 $’000 $’000 $’000

2008 Receivables 87,675 - 186,157 273,832 Bond Portfolio 1,145,365 77,800 299,500 1,522,6652007 Receivables 116,012 50 186,803 302,865 Bond Portfolio 879,370 753,700 503,200 2,136,270

1) Short term ratings of A-2 or better, when counterparty has no long term rating or the long term rating is A or lower. A great majority of receivables are from government agencies with no credit rating.

Liquidity Risk

The liquidity of SICorp’s investments is assured by the high-credit nature of the fixed interest investments and the fact that all Hour-Glass share and property investments are required to be listed on a recognised stock exchange.

In accordance with the Memorandum of Understanding, TCorp is to consider its ability to exit the Portfolio’s holdings in an orderly manner, in the context of the aggregate holdings of each security contained in the Portfolio and the market turnover of each security.

During the current and prior years, there were no defaults on payables. No assets have been pledged as collateral. SICorp’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and the current assessment of risk.

The payables are recognised for amounts due to be paid in the future for goods or services received, whether or not invoiced. Amounts owing to suppliers (which are unsecured) are settled in accordance with the policy set out in Treasurer’s Direction 219.01. If trade terms are not specified, payment is made no later than the end of the month following the month in which an invoice or a statement is received. Treasurer’s Direction 219.01 allows the Minister to award interest for late payment. There has been no interest awarded for late payment to date.


The table below summarises the maturity profile of SICorp’s financial liabilities.

Interest Rate Exposure Maturity DatesWeighted Normal Fixed Variable Non- < 1 1 - 5 > 5Average Amount Interest Interest Interest Year YearsEffective Rate Rate BearingInterest

Rate% $’000 $’000 $’000 $’000

2008 Payables - - - - 43,066 43,066 - -Total Financial Liabilities - - - - 43,066 43,066 - -2007 Payables - - - 42,065 42,065 - -Total Financial Liabilities - - - 42,065 42,065 - -

25. COMMITMENTS FOR EXPENDITURE

SICorp has one commercial lease. This lease has a six year life with renewal option included in the contract. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:2008 2007

$’000 $’000Operating Lease Commitments - Lessee

- No later than one year 336 336 - Later than one year and not later than five 1,293 1,342 - Later than five years - 287

1,629 1,965 Operating lease commitments are inclusive of GST. The total amount above includes input tax credits of $148.1k (2007: $178.5k) that are expected to be recovered from the Australian Taxation Office

26. CONTINGENT ASSETS

There are no known contignet assets at balance date.


27. CONTINGENT LIABILITIES

Under the Claims Management Agreement between SICorp and its claims providers, there are five annual periods of assessment of the tail management incentive fees. The periods are as follows: Period 1: 31/12/05 to 31/12/06 Period 2: 31/12/06 to 31/12/07Period 3: 31/12/07 to 31/12/08Period 4: 31/12/08 to 31/12/09Period 5: 31/12/09 to 31/12/10

The incentive fees are actuarially assessed. As at 30 June 2008, included within the total management fees is an incentive fees amount of $9.2 million which was for Period 1 payments. Tail incentive fees for 2007 (Period 2) will be paid during 2008/09.

28. EVENTS AFTER THE BALANCE SHEET DATE

There are no events subsequent to reporting date requiring disclosure.

-- End of Audited Financial Report--

NSW Self Insurance Corporation - Annual Report 2007-08��

SECTION 5 - Appendices

Commitment to Community Values

Code of ConductAs a branch of Treasury’s OFM, SICorp share the same over arching philosophies and principals as OFM.

SICorp and OFM share a common code of conduct that is based on:

• the public’s right to expect the highest level of integrity and competence of our staff• accurate advice and prompt policy implementation• the rights and obligations of staff as employees.

This code is available to all SICorp and OFM staff via the Intranet and all new staff members are required to familiarise themselves with the Code at their induction.

Ethnic Affairs StatementBeing closely related to the OFM, SICorp has an indirect involvement in policy and services for the ethnic community through the management of the State’s finances including the growth of the Treasury Managed Fund.

OFM is a policy based organisation providing advice to the Government and interacting with other government agencies. It does not provide any services directly to the ethnic community.

In undertaking it activities, OFM supports the objectives of service provision agencies and has regard for the particular needs of the ethnic community when advised by those agencies. OFM is not a party to any current ethnic affairs agreements.

Occupational Health & Safety

2006 2007 2008Reported Workplace Incidents

14 9 14

OH&S Assessments Conducted

5 10 4

Note: Figures shown in this table represent the experience for all of OFM including SICorp.

OFM management supports an in-house OH&S Committee. The Committee has social responsibility for conducting OH&S briefings as part of our induction program and carrying out continuous inspections of work areas in GMT and at 201 Elizabeth St. The Committee works with other areas to successfully address relevant social and environmental issues such as manual handling for staff involved in collating and distributing the annual State Budget Papers. The Committee interacts with our First Aid officers to ensure appropriate signage is displayed in work areas and for the placement of first aid kits.

Staff in our records management and IT areas attended manual handling training provided by WorkCover.

An important element of our healthy workforce policy is to support and encourage a culture of healthy lifestyles which reduces health related risks such as fatigue, heart disease and obesity. OFM management encourages and supports staff by:

• providing in-house introductory first aid training• funding staff attendance at privately provided Senior first aid training• Representation in sporting events eg. mini triathlon around Lady Macquarie’s chair


• permitting use of the internal email network to promote events and to keep everyone in formed of event outcomes• conducting raffles to help fund sporting events• providing team t-shirts and caps for team sports• allowing bicycles to be stored in office area.

Both male and female staff participate across a range of events:

• Running - City to Surf, Corporate Cup, Sydney runners’ festival• Swimming - mini triathlon and the Sydney Harbour swim• Walking - many staff walk in the Botanic Gardens during their lunch time and participate in the annual Secretary’s’ walk/run• Team events - mixed soccer and touch football• Cycling - teams enter in the Wollongong bike ride and Ride to Work day.

Our free flu vaccination program has now been running for five years. During 2008 45% of staff participated.

Disability Strategic PlanSICorp’s Disability and Strategic Plan ensures that the needs of people with disabilities are taken into account in the way we go about our business.

SICorp’s main direct interaction with the community is via its website, which provide information about Self Insurances and the Treasury Managed Fund.

The website caters for broad accessibility requirements. It is plainly designed and has a limited use of images and is easy to navigate.

One of SICorp’s major projects for 2007/08 was to evaluate how our website was being used and how we could improve the usability and navigation of the website.It has been recommended that SICorp utilise portal technology to give our website broader access and make it easier to use.

This project should commence in early 2008 and allow SICorp to meet all of the requirements of the NSW Government Website Style Directive.

All offices occupied by Treasury continue to provide access and amenities to visitors with disabilities.

Action Plan for WomenThe Action Plan for Women seeks to improve outcomes for women. It focuses on:• reducing violence• promoting safe and equitable workplaces• promoting the position of women in society• improving access for education• improving health and quality of life.

Direct service agencies develop and implement strategies and programs to benefit women in the community. Treasury takes these objectives into account when advising on resource allocation.

More directly, Treasury continues to be a major contributor to the Lucy Mentoring Program, which provides female university students from non traditional educational backgrounds with access and exposure to women in senior business roles.

During 2007-08 OFM Directors mentored four Lucy participants. Two former Lucy Program participants have been appointed to the Fast Track Graduate Program

Privacy Management PlanSICorp has a privacy management plan in compliance with the NSW Privacy and Personal Information Protection Act, 1998. It includes: Policy and practices; Details of classes of information held; and Review procedures.

No privacy codes of practice were published or specific exemptions sought by SICorp during the year.

SICorp’s access to personal information is largely centred around its oversight of the Treasury Managed Fund insurance arrangements. Consideration to privacy issues has been included in the processes involved in increasing the number of providers being used in the administration of this fund.

No requests were received during the year.


Trends in the Representation of EEO Groups

EEO Group Benchmark or Target 2006 2007 2008

Women 50% 43% 44% 43%Aboriginal People & Torres Strait Islanders 2% 0% 0% 0.5%People Whose Language First Spoken as a Child was not English 20% 16% 16% 19%People with a Disability 12% 2% 2% 2%People with a Disability Requiring Work-related Adjustment 7% 0.4% 0.8% 0.8%

Trends in the Representation of EEO Groups

EEO Group Benchmark or Target 2006 2007 2008

Women 100 88 82 89Aboriginal People & Torres Strait Islanders 100 na na naPeople Whose First Language was not English 100 87 90 89People with a Disability 100 na na naPeople with a Disability Requiring Work-related Adjustment 100 na na na

The statistics are based on OFM and SICorp staff numbers as at 30 June, excluding casual staff.

A Distribution Index of 100 indicates that the centre of the distribution of the EEO group across salary levels is equivalent to that of other staff. Values less than 100 mean that the EEO group tends to be more concentrated at lower salary levels than is the case for other staff. The more pronounced this tendency is, the lower the index will be. In some cases the index may be more than 100, indicating that the EEO group is less concentrated at lower salary levels.

The Distribution Index is not calculated where EEO group or non-EEO group numbers are less than 20.

Equal Employment OpportunityAchievements During the YearOFM instigated the NSW Indigenous Cadetship Program which provides financial assistance, work experience and ultimately employment for Aboriginal people currently enrolled in university. Recruitment action commenced for 2007/08 and OFM is committed to increasing Aboriginal staff numbers within the organisation.

Flexible work practices continued to be promoted and offered to all staff including senior staff. A few Directors were able to avail themselves of job share arrangements and long term paternity leave. Flexible work options continued to assist and provide incentive for participation, particularly for women.

Officers in lower salary levels were targeted for developmental training. 14 administrative staff, mostly women, completed their Certificate IV courses to increase their employability in the NSW Public Sector.

Strategies for 2008-09OFM’s Aboriginal employment strategy will continue to focus on the NSW Indigenous Cadet

Program - job support within the program will be extended, and mentoring and tutoring assistance will be provided as required.

OFM will continue to play a lead role in the Lucy Mentoring Program. We will participate in forums for participants outside OFM and encourage suitable candidates to apply for the OFM Graduate program and the NSW Government Fast Track program.

OFM continues to provide innovative work arrangements to allow broad participation and a balance between work, family and other outside activities. Enhanced opportunities for part time work are available, and structured use of variable hours of work will be implemented within agreed parameters.

To assist work management flexibility, options for broader remote access to in house systems will be explored.

Certificate IV training will continue to be offered to administrative staff.


Use of Consultants

Consultants costing $30,000 or more

Consultant Project Amount (ex GST)

Foundation Technology Services (trading as ANATAS)

• SICorp Web Portal Development and Implementation 124,800

Finity Consulting Pty Ltd • Liability Claims review 2006/07• Property Claims Review 2006/07

89,991

MinterEllison • Contract of Coverage Review 34,446

The engagement of Claims Managers, Risk Managers and Reinsurers are by commercial in confidence contracts and are classified as contractors.

Operations

Over Seas Visits

London – Reinsurance Negotiations

Director, Steve Hunt, met with major international reinsurers in London, which is the traditional financial capital of the world’s largest and most influential reinsurers. Ensuring reinsurers have a good understanding of client business and risk profile is essential for their consideration of cover, premiums, terms and conditions.

The trip proved successful with all reinsurance arrangements for 2008-09 in place by 30 June 2008.

Energy ManagementSICorp is committed to achieving savings in energy usage. Sustainable energy management principles are applied in line with the NSW Treasury Energy Management Plan.

Mechanisms and Strategies are adopted to lower costs and usage without adversely affecting ongoing activities.

SICorp occupy half a floor at 201 Elizabeth Street, Sydney. The Building purchases electricity consumables on the contestable electricity market via the State Contracts Control Board.

Waste Reduction PolicySICorp’s waste reduction and purchasing policy remains in place. Strategies include:

Reducing Waste Generation

To encourage recycling practices and discourage the production of unnecessary waste, all of SICorp’s staff had their personal waste bins removed in favour or centralised waste and recycling bins that are strategically positioned through out the office.

Resource Recovery

Printers with high environmental ratings are now standard for use in the Office. These printers have been placed in each area as part of our automation replacement program.

All major equipment purchases are now reviewed by our IT Steering Committee. The Committee has included environmental ratings as a key requirement for equipment purchases.

Using Recycled Materials

Recycled materials in the form of paper and consumables remain a key component of our procurement practices.


TMF Advisory BoardKen Barker– ChairDepartment of Health

Peter RiordanDepartment of Education and Training

David RodenDepartment of Premier and Cabinet(resigned August 2007 due to retirement)

Gerry SchippDepartment of Corrective Services

Meryl McCracken Independent Pricing and Regulatory Tribunal

Arthur DiakosNSW Police

Anne YoungChair of the PSRMA

Kathryn HeilerNSW Fire Brigades

Claudio BattilanaSydney Water(resigned May 2008)

Vicki TelferWorkCover Authority

Steve HuntSelf Insurance Corporation

Peter EnglishNSW Treasury

Service Level Agreements Groups

Service Level Agreement Workers Compensation Number 1 portfolio

Linda Richardson to October 2007 then Natalie MorrisDepartment of Education and Training

Lesley BazleyNorth Coast Area Health Service

Belinda Collier or Dianne ChiofaloNorth Sydney/Central Coast Area Health Service

Bronwyn Hughes Justice Health

Ros SimpsonHealth Support

David WilkinsonDepartment of Health

Amanda ReynoldsGIO

Karen HolmanGIO

Matt BeerGIO

Brad Cole – ChairSICorp


Lyn ColleyDepartment of Corrective Services

Joie Dorotheo or Gary ZuiderwykDepartment of Juvenile Justice

David WilkinsonDepartment of Health


Peggy OppelSouth Eastern Sydney/Illawarra Area Health Service

Helen HosonSydney West Area Health Service


Cathy TuffySydney South West Area Health Service

Rachel Elmes Employers Mutual

James AuEmployers Mutual



Judith Harriss or Michael Najem or Rae GiffenRoads and Traffic Authority

Jodie Goldring or Joanne O’KeefeAttorney General’s Department

Danny MoroneyNSW Rural Fire Service

Gael ProphetDepartment of Aging, Disability and Home Care

Marcus StephensonNSW Police

Jason Innes to October 2007 then Linda RicharsdonNSW Fire Brigades

Danielle Crampton or Libby VandyDepartment of Community Services

Darren WaughAllianz

Judy GradyAllianz


Service Level Agreement Non-Workers Compensation portfolio

Belinda Collier or Dianne ChiofaloNorth Sydney/Central Coast Area Health Service

Helen Hoson from February 2008Sydney West Area Health Service


David Wilkinson Department of Health

Chris Pasterfield or Val Scully or Margaret GorkaDepartment of Education and Training

Judith Harriss or Michael Najem or Rae GiffenRoads and Traffic Authority

Jaak NormetDepartment of Commerce

Mark Hicks or David ProsserNSW Police

Terry Natsia from May 2008Sydney Water

Trevor Brown GIO

Ray BlighGIO

David KumarGIO



PublicationsConsistent with SICorp’s Waste Reduction Policy, and in line with the online resources that SICorp provides to its stakeholders, the majority of publications that SICorp produces utilise web base technology or electronic delivery mediums.

TMF Bulletin

As part of the communication strategy SICorp delivers a regular Bulletin to relevant and interested parties associated with the TMF.

The TMF Bulletin covers all relevant issues affecting the TMF community including information on data integrity, procedures, hindsight adjustments, risk management activities and actuarial reports.

The TMF Bulletins that were published in 2007-08 include:

• TMF Bulletin Vol. 18• TMF Bulletin Vol. 19• TMF Bulletin Vol. 20• TMF Bulletin Vol. 21• TMF Bulletin Vol. 22• TMF Bulletin Vol. 23• TMF Bulletin Vol. 24• TMF Bulletin Vol. 25• TMF Bulletin Vol. 26• TMF Bulletin Vol. 27

In 2007-08 10 TMF Bulletins were published. These are available on the SICorp website:www.sicorp.nsw.gov.au

Electronic Service Delivery

SICorp adheres to the Government’s Electronic Service Delivery Strategy to ensure our stakeholders receive full, accurate and up to date information.

All SICorp business intelligence reports, bulletins, communications and presentations are distributed via the web. The site is intended to be a full resource for any member of the TMF community.

TMF AwardsIn December 2007 Suncorp Risk Services in partnership with Allianz, EML and GIO hosted the 8th Annual Risk Management Awards event recognising better practice risk management within the TMF.

The Winners of the various awards were:

Risk Management Awards

Category 1: Integrating Risk Management into Organisational Planning

This award recognises excellence in the application of risk management as a key decision support

tool that feeds into the organisation’s planning processes. Using a mature approach to risk management, the organisation will be able to demonstrate the integration of risk management with planning processes, in order to provide an effective organisation-wide management system that aligns the management of risk with the management of organisational objectives.

The award for Integrating Risk Management into Organisational Planning was presented to Hunter New England Area Health Service for the Integrating Risk Management initiative.

The judges recognised that Hunter New England Area Health Service (HNEAHS) had gone to

State Library of NSW


great lengths to ensure that risk management was integrated, not only within their approach to planning, but also within their approach to performance measurement and audit.

Importantly for the judges, HNEAHS demonstrated an understanding that, while they have been implementing risk management for a number of years, they need to continue to learn and improve their approach.

Category 2: Building Capability in Risk Management (non OHS)

This award recognises excellence in those organisations that have a clear focus on building their risk management capability. It requires demonstration of the processes associated with the identification of organisational and individual risk management capability needs, as well as the design, delivery, or leveraging of opportunities to develop this capability.

There was no winner in this category this year. However, the judges highly commended BusinessLink for their approach to building capability in risk management.

The judges were very impressed with the honesty and candour that Businesslink showed, and their recognition that risk management is a major undertaking that requires time. They approached the awards process as a learning opportunity as well as a chance to receive feedback and ensure that they were on the right track. The judges felt that while they need more time to focus on implementing their approach, their efforts so far were laudable and deserving of recognition.

Occupational Health & Safety and Injury Management Awards

Category 1: Safety Leadership and Accountability

This award recognises excellence in management commitment, leadership, and accountability for OHS&IM, promoting an organisation-wide positive health and safety culture through actions, programs, and systems implementation.

The winner of the Safety Leadership and Accountability category was NSW Health for the

NSW Health OHS&IM Profile Tool.

NSW Department of Health’s entry demonstrated executive commitment and active involvement in OHS&IM. The initiative has driven the organisation’s focus on health and safety leadership through the use of a comprehensive internal audit tool that links to executive performance agreements, manager accountabilities, and OHS improvement planning. The initiative has fostered benchmarking, safety leadership, and the sharing of best-practice strategies to improve whole of organisation health and safety outcomes.

Category 2: OHS Risk Management

The award in this category recognises excellence in risk management systems and practice embedded in the organisation’s operations and culture, to ensure responsiveness to health and safety risks and achievement of the highest levels of performance. The judges acknowledged the work being done by agencies and have provided positive and constructive feedback. However, there was no winner this year.

Category 3: OHS&IM Knowledge, Capability and Participation

This award recognises excellence in building OHS&IM knowledge, capability, and participation of employees. The winner must be able to demonstrate that they have programs that promote safety leadership, build staff capability, and ensure that staff are competent to safely undertake their work.

The award for OHS&IM Knowledge, Capability and Participation was presented to State Emergency Service for the SES Critical Incident Support Program.

The entry by SES demonstrated a focus on building staff capability to reduce the impact of critical incidents. The SES Critical Incident Support Program provides an integrated system of interventions to prevent and mitigate adverse psychological reactions by its working members and families. Safety leadership is promoted by the involvement of peers and chaplains who are trained to deliver support services to their colleagues. Trust, credibility, and ongoing care are key components of the initiative, achieved through participation, ownership, training, and support.


Category 4: Injury Management

This award recognises excellence in the management of injury and illness. It requires a demonstration that the organisation is committed to injury management and the implementation of programs that ensure the timely, safe, and durable return-to-work of employees.

The winner of the Injury Management category was the Department of Disability, Ageing and Home Care for their entry, Injury Management - Making a difference.

The Department of Disability, Ageing and Home Care’s (DADHC) successful application demonstrated strong commitment and accountability for injury management. The DADHC entry responded to a need to improve the management of workplace injury and build the long term capability of injury management staff.

A staged approach was implemented to develop a logical and practical injury management program, purpose-built for the organisation during a time of change. Robust consultation with stakeholders was a key feature, including partnering with regional directors to ensure consistency and accountability. The injury management program is integrated into corporate plans, executive contracts, and management accountabilities, and is accompanied by training and support.

Finally, the 2007 OHS&IM judges decided to present an additional award to acknowledge an agency that has been a significant contributor to TMF risk management over many years. This special award for long term contribution to OHS&IM was bestowed upon the NSW Roads and Traffic Authority (RTA).

The RTA’s strong commitment to OHS&IM, and an action-oriented approach, has been demonstrated by their participation in the award program over the years, and the many initiatives they have shared with the TMF community. Their staff have actively engaged in TMF forums, presenting at TMF events including the OHS&IM Public Sector Conference.

The RTA have also contributed to Public Sector Risk Management Association (PSRMA) seminars and communities of practice. Over the years the RTA has readily opened its doors to colleagues and TMF agencies to share their knowledge and initiatives.

The commitment of the executive leadership team of the RTA demonstrates drive and support for their OHS&IM programs and staff. This special award was made in order to recognise the RTA’s willingness to offer their time and experience to advance risk management across the TMF.

PSRMA EventsOn behalf of SICorp, Suncorp Risk Services facilitated these PSRMA events during 2007-08:

July, 2007 Public Sector Response to Bullying & Harassment

October, 2007 Risk Framework Quality Review

December, 2007 TMF Awards

March, 2008 Corporate Compliance Framework

June, 2008 Workplace Health Promotion

OHS& IM CoalitionOn behalf of SICorp, Suncorp Risk Services facilitated these OHS & IM events during 2007-08:

August, 2007Workplace Health Promotion

October 2007Chief Executives Breakfast


Rehabilitation Co-ordinators NetworkOn behalf of SICorp, Suncorp Risk Services facilitated these PSRMA events during 2007-08:

July, 2007Work related psychological disordersPresenters: Mr John Raue and Mr Peter Briggs.

November 2007Self-Management & Functional Conditioning Presenter: Chris Tzar. MSc (Ex. Rehab.) BSc (HMS) Accredited Exercise PhysiologistDirector – Lifestyle Clinic, Faculty of Medicine, University of NSW

President (NSW) – Exercise Physiologists Association (AAESS)

April 2008Dual Diagnosis in RehabilitationPresenters: Gunter O. Swoboda, MAPSSwoboda & Associates Pty. Ltd.

Improving outcomes: Integrated, active management of workers with soft tissue injuryPresenter: WorkCover NSW

New FOI ApplicationsHow many FOI applications were received, discontinued or complete?

NUMBER OF FOI APPLICATIONSPERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08A1 New 155 158 3 5 158 163A2 Brought forward 12 10 1 - 13 10A3 Total to be processed 167 168 4 5 171 173A4 Completed 157 156 4 4 161 160A5 Discontinued - - - 1 - 1A6 Total processed 157 156 4 5 161 161A7 Unfinished (carried forward) 10 9 - - - 9

Discontinued ApplicationsWhy were FOI applications discontinued?

NUMBER OF DISCONTINUED FOI APPLICATIONSPERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08B1 Request transferred out to another agency (s.20) - - - - - -

B2 Applicant withdrew request - - - - - -B3 Application failed to pay advance deposit (s.22) - - - 1 - -

B4 Applicant failed to amend a request that would have been an unreasonable diversion of resources to complete (s.25(1)(a1))

- - - - - -

B5 Total discontinued 0 0 0 1 0 0

Freedom of Information Statistics


Completed ApplicationsWhat happened to complete FOI applications?

NUMBER OF COMPLETED FOI APPLICATIONSPERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08C1 Granted of otherwise available in full 131 127 - 1 131 128

C2 Granted or otherwise available in part 26 29 4 3 30 32

C3 Refused - - 1 - - -C4 No documents held - - - - - -C5 Total completed 157 156 4 4 161 160

Application Granted or Otherwise Available in FullHow were the documents made available to the applicants?


All documents requested were: 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08D1 Provided to the applicant 131 125 - 1 131 126D2 Provided to the applicant’s medical practitioner - 2 - - - 2

D3 Available for inspection - - - - - -D4 Available for purchase - - - - - -D5 Library material - - - - - -D6 Subject to deferred access - - - - - -D7 Available by a combination of any of the reasons listed in D1-D6 above

- - - - - -

D8 Total granted or otherwise available in full 131 127 - 1 131 128

Application Granted or Otherwise Available in PartHow were the documents made available to the applicants?


Documents made available were: 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08E1 Provided to the applicant 26 29 4 3 4 32E2 Provided to the applicant’s medical practitioner - - - - -

E3 Available for inspection - - - - - -E4 Available for purchase - - - - - -E5 Library material - - - - - -E6 Subject to deferred access - - - - - -E7 Available by a combination of any of the reasons listed in E1-E6 above

- - - - - -

E8 Total granted or otherwise available in part 26 29 4 3 30 32


Refused FOI ApplicationWhy was access to the documents refused?

NUMBER OF REFUSED FOI APPLICATIONSPERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08F1 Exempt - - - - - -F2 Deemed refused - - - - - -F3 Total refused - - - - - -

Exempt DocumentsWhy was access to the documents refused?

NUMBER OF FOI APPLICATIONS (REFUSED OR ACCESS GRANTED OR OTHERWISE

AVAILABLE IN PART ONLY)PERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08Restricted documents: G1 Cabinet documents (Clause 1) - - - - - -

G2 Executive Council documents (Clause 2) - - - - - -

G3 Documents affecting law enforcement and public safety (Clause 4)

- 1 - - - 1

G4 Documents affecting counter terrorism measures (Clause 4A) - - - - - -

Document requiring consultation:G5 Documents affecting intergovernmental relations (Clause 5)

- - - - - -

G6 Documents affecting personal affairs (Clause 6) - 25 - 3 - 28

G7 Documents affecting business affairs (Clause 7) - - - - - -

G8 Documents affecting the conduct of research (Clause 8) - - - - - -

Documents otherwise exempt:G9 Schedule 2 exempt agency - - - - - -

G10 Documents containing information confidential to Olympic Committee (Clause 23)

- - - - - -

G11 Documents relating to threatened species, Aboriginal objects or Aboriginal places (Clause 23)

- - - - - -

G12 Documents relating to threatened species conservation (Clause 24) - - - - - -

G13 Plans of management containing information or Aboriginal significance (Clause 25)

- - - - - -

G14 Private documents in public library collection (Clause 19) - - - - - -

G15 Documents relating to judicial functions (Clause 11) - - - - - -

G16 Documents subject to contempt (Clause 17) - - - - - -


G17 Documents arising out of companies and securities legislation (Clause 18)

- - - - - -

G18 Exempt documents under interstate FOI Legislation (Clause 21) - - - - - -

G19 Documents subject to legal professional privilege (Clause 10) - 3 - - - 3

G20 Documents containing confidential material (Clause 13) - - - - - -

G21 Documents subject to secrecy provision (Clause 12) - - - - - -

G22 Documents affecting the economy of the state (Clause 14) - - - - - -

G23 Documents affecting financial or property Interest of the State or an agency (Clause 15)

- - - - - -

G24 Documents concerning operations of agencies (Clause 16) - - - - - -

G25 Internal working documents (Clause 9) - - - - - -

G26 Other exemptions (eg., Clauses 20,22A and 26) - - - - - -

G27 Total applications including exempt documents 26 29 4 3 30 32

Ministerial CertificatesHow many Ministerial Certificates were issued? NUMBER OF MINISTERIAL

CERTIFICATES2006-07 2007-08

H1 Ministerial Certificates Issued - -

Formal ConsultationsHow many formal consultations were conducted? NUMBER

2006-07 2007-08I1 Number of applications requiring formal consultation - 4I2 Number of persons formally consulted - 132

Amendment of Personal RecordsHow many applications for amendment to personal records were agreed or refused?

NUMBER

2006-07 2007-08J1 Agreed in full - -J2 Agreed in part - -J3 Refused - -J4 Total - -


Notation of Personal RecordsHow many applications for notation of personal records were made (s.46)?

NUMBER OF APPLICATIONS FOR AMENDMENT OF PERSONAL RECORDS

2006-07 2007-08K1 Applications for notation - -

Fees and DiscountsWhat fees were assessed and received for FOI applications processed (excluding applications transferred out)?

Assessed Cost Fees Received

2006-07 2007-08 2006-07 2007-08L1 All completed applications $5,100 $5,760 $5,100 $5,670

Fee DiscountsHow many fee waivers or discounts were allowed and why?

NUMBER OF APPLICATIONS (WHERE FEES WERE WAIVED OR DISCOUNTED)

PERSONAL OTHER TOTAL2006-07 2007-08 2006-07 2007-08 2006-07 2007-08

M1 Processing fees waived in full - 1 1 - - 1M2 Public interest discounts - - - - - -M3 Financial hardship discounts - pensioner or child 2 1 - - 2 1

M4 Financial hardship discounts - non profit organisation - - - - - -

M5 Total 2 2 - - 2 2

Fee RefundsHow many fee refunds were granted as a result of signification correction of personal records

NUMBER OF REFUNDS

2006-07 2007-08N1 Number of fee refunds granted as a result of significant correction of personal records.

- -

Days Taken to Complete RequestHow long did it take to process completed applications (Note: calender days)


2006-07 2007-08 2006-07 2007-08 2006-07 2007-08O1 0-21 days - statutory determination period 149 142 1 - 150 142

O2 22-35 days - extended statutory period for consultation or retrieval of archived records (S.59B)

- 2 2 4 10 6

O3 Over 21 days - deemed refusal where no extended determination period applies

8 2 - - - 2

O4 Over 35 - deemed refusal where extended determined period applies - - 1 4 1 -

O5 Total 157 156 4 4 161 160


Processing Time: HoursHow long did it take to process complete applications


2006-07 2007-08 2006-07 2007-08 2006-07 2007-08P1 0-10 Hours 155 158 3 3 158 161P2 11-20 Hours 2 - - 1 2 1P3 21-40 Hours - - 1 - 1 -P4 Over 40 Hours - - - - - -P5 Total 157 158 4 4 161 162

Number of ReviewsHow many reviews were finalised? NUMBER OF COMPLETED REVIEWS

2006-07 2007-08Q1 Internal reviews 1 -Q2 Ombudsman reviews - 1Q3 ADT reviews - -

Results of Internal ReviewsGROUNDS ON WHICH THE INTERNAL REVIEW WAS REQUESTED

NUMBER OF INTERNAL REVIEWSPERSONAL OTHER TOTAL

2006-07 2007-08 2006-07 2007-08 2006-07 2007-08R1 Access refused - - - - - -R2 Access deferred - - - - - -R3 Exempt matter deleted from documents 1 - - - - -

R4 Unreasonable charges - - - - - -R5 Failure to consult with third parties - - - - - -

R6 Third parties views disregarded - - - - - -R7 Amendments of personal records - - - - - -R8 Total 1 - - - - -

Legislations• NSW Self Insurance Corporation Act 2004 No 106

AcronymsAALAllianz Australia Insurance LimitedAIFRSAustralian equivalents of International Financial Reporting StandardsEMLEmployers Mutual Limited

GIOGIO General LimitedGWC Government Workers Compensation FundIABInternal Audit Bureau


Statutory RequirementsAboriginal and Torres Strait Islanders 63Access details 4Action Plan for Women 62 Aims & Objective 6Annual Report - costs & details 4Auditor-General’s opinion 30Charter 5Clients & Stakeholders 15Code of conduct 61Commitment to Service 14Committees 65Consultants 64Consumer response 14Contact details 4Corporate objectives 6Credit Card Certification 25Disability Strategic Plan 62 Economic/other factors affecting achievement 25Electronic service delivery 67Energy management policy 64Equal employment opportunity 63Ethnic affairs priority statement 69 Exemptions from the reporting provisions n/aExecutive remuneration & qualifications n/a(See OFM Annual Report for Details)Female Executive Officers n/aFinancial Statements 34 Freedom of information 78Funds granted to non-government bodies n/aHighlights for 2006/07 20Human resources 13Legal change n/aLegislative change n/a

Letter of Submission to Minister 2Major assets 46Management & Activities 12Management & Structure 13Mission 7 Occupational Health & Safety 69Organisation chart 13Overseas travel 72Payment of accounts 29Performance indicators 15Personnel policies & practices 69Principal Officers 12Privacy management plan 70Promotion 75Publications 75 Remuneration - officers above SES level 9 n/aReport on operation 23Research & development 24Risk management 23Senior executive service 12Staff establishment tables 13Summary review of operations 8Time for payment of accounts 30Vision 7 Waste Reduction 72

OFMOffice of Financial ManagementOHSIMCOccupational Health & Safety and Injury Management CoalitionPMFPremanaged Fund LiabilitiesPSRMAPublic Sector Risk Management AssociationPSRCNPublic Sector Rehabilitation Coordinators Network

PwCPricewaterhouseCoopersRMLGRisk Management Leadership GroupSICorpNSW Self Insurance CorporationTAC Transport Accident Compensation FundTMFTreasury Managed Fund


IndexAC3 12Accounting Policies 42Accounting Standards 44Acronyms 84Action Plan for Women 70Actuarial Services 10, 12 18,19Advisory Board 18, 20Agencies 14, 17 18, 24, 25, 26, 75Agency 18, 27Agency Advisory Board 8Agency Council 8Allianz Australia Insurance Limited 10, 16 21, 75Assets 32, 39A 46, 53Audit Report 35, 36Balance Sheet 39, 60 68Benchmarks 12Benfield Pty Ltd 10Budget 30, 33 34Budget Estimates 17Cash 46Cash Flow Statement 40, 58Charter 7Claims Expenses 50Claims Managers 10, 12 15, 24Code of Conduct 69Commitment To Community Values 69Contingent Assets 67Contingents Liabilities 68Contract of Coverage 12, 17 18Credit Card Certification 32Credit Risk 66Credit Risks 64Critical Service Standard 3 24Crown Asset Liability Management (CALM) 29,30Crown Entity 31, 33 45, 50, 59Data Warehouse 7, 12 16, 20, 21Derivative Finanacial Instruments 43, 47 52Disabilitiy Strategic Okab 70Electronic Service Delivery 75

Employers Mutual Limites (EML) 10, 11 16, 21, 75Energy Management 72Equal Employment Opportunity 71Equity 39, 57Ethnic Affairs Statement 69Expenditure 67Expenses 31, 33 38, 45, 51, 59Financial Assets 65Financial Instruments 61Financial Statement 34Freedom of Information 12Freedom of Information 78GIO General Limited (GIO) 10, 11 16, 21, 75Goods and Services Taxes 49Government Workers Compensation Account (GWC) 7, 29 41,56, 60Health Liability Claims 10Hindsight 14Impairment of Assets 48Income 38Income Statement 31, 38 59Income Tax 46Intangible Assets 48Intangibles 55Interface Specifications 12Internal Audit Bureau (IAB) 8, 20Investment 32Investment Income 45, 50Investment Performance 28Investments 46Leases 46Legislations 84Liabilities 32, 39 48, 57, 17, 21,24Liquidity Risk 66Lucy Mentoring Program 71Market Risks 62Miscellaneous Risk 8, 11 17, 21, 24, 27Monitoring 17Motor Vehicle 8, 11 17, 21, 24, 27Net Assets 39Net Equity 32NSW Government 17


NSW Self Insurance Corporation (SICorp) 6, 8 41, 72NSW Treasury 12, 19

NSW Treasury 27, 28NSW Treasury Corporation (Tcorp) 8, 28Occupational Health & Safety 9, 69Occupational Health & Safety and Injury Management (OHS&IM) 25, 77Office of Financial Management 27, 32 69, 71OH&S Committee 69OHS Self Assessment Toll (OHSAT) 26Outstanding Claims 56Over Seas Visits 72Payables 55Performance Review 27Pre-managed Fund Reserve 7, 41Premium Entities 14Premium Revenue 49Premiums 11, 14 15, 16 22, 44PricewaterhouseCoopers Actuarial 10, 21Privacy Management Plan 71Property 8, 11 17, 21 24, 27Property,Plant and Equipment 54Provisions 48Public Liability 8, 27Public Sector Rehabilitation Co-ordinators Network (PSRCN) 26Public Sector Risk Management Association (PSRMA) 25, 77Publications 75Receivables 47, 51 65Reducing Wast Generation 72Re-habilitation Coordinators Network (PSRCN) 78Reinsurance 22, 32 45, 47, 49, 52, 65, 72Reisurance Services 10Resource Recovery 72Restoration 57Revenue 31, 33 44, 59 Risk InSite 12, 21Risk Management 9, 12 61Risk Management Leadership Group 26Risk Management Services 10, 18 26, 27

Service Level Agreement Groups 9, 18 25, 73 74Service Level Agreements (SLA) 18Service Providers 7, 18 22Services 7SICorp 18, 19 20, 21, 23, 24, 25, 27SICorp Grading Structure 13SICorp Management Team 12SICorp Organisational Structure 13SICorp Strategic Plan 20Statement of Compliance 43Statutory Requirements 84Strategic Asset Allocation (SAA) 28Suncorp Risk Management Services 10Taylor Fry Pty Ltd 10TMF Advisory Board 25, 73TMF Bulletin 75TMF Community 25TMF Member Agencies 7, 24TMF Membership 8, 14TMF Risk Management Awards 9, 75TMF Sponsored Projects 26Trade Debtors 65Transport Accidents Compensation Fund (TAC) 7, 29 42, 56, 60Transport Accidents Compensation Fund (TAC) Treasury Managed Fund (TMF) 7, 8 12, 14, 16, 27, 29, 41, 56, 60, 70Use of Consultants 72Using Recycled Materials 72Values 7Waste Reduction Policy 72WorkCover NSW 18, 21 69Workers Compensation 8, 10 11, 12, 14, 15, 16, 17, 21, 27

NSW SELF INSURANCE CORPORATION · NSW Self Insurance Corporation - Annual Report 2007-08 8 About...

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