Reserves Policy of the Accident Rehabilitation and Compensation Insurance Corporation Pursuant to section 128 of the Accident Rehabilitation and Compensation Insurance Act 1992, as amended by section 40 of the Accident Rehabilitation and Compensation Insurance Amendment (No. 2) Act 1993: Premia shall be set with the intention of meeting the current cost of claims and administration-related expenses in the year in which the premia apply and maintaining reserves at, or moving reserves towards (in a reasonable time frame), the equivalent of 6 months of the upcoming premium year's cost of claims and administration-related expenses. The scheme holds reserves for three purposes: 1. To meet unexpected fluctuations in both expenditure and the liable earnings base; 2. To allow for premium rate smoothing, where this is appropriate; 3. To provide the scheme with necessary working capital. G. McGREEVY, General Manager, Executive Services.