Self-employed Work Account Premiums
ACC invites premium payers to make submissions on the premium rates for the Self-employed Work Account, before a recommendation is made to the Minister for Accident Insurance. It is proposed that the new premium rates will become law from 1 April 2000.
Proposed Legislative Change
Parliament is currently considering a Bill designed to make changes to the competitive provision of accident insurance. This Bill, the Accident Insurance (Transitional Provisions) Bill, was introduced into Parliament before Christmas and referred to a special Select Committee for consideration. It is expected that this Bill will become law by 1 April 2000.
For self-employed people, the Bill focuses on removing the ability of the self-employed to choose an insurer other than ACC from 1 April 2000. There will be no change for those self-employed people who chose to remain with ACC. However, those who have chosen to be covered by a private insurer will be returned to ACC for cover. The self-employed work account will continue to provide cover for work place accidents for self-employed.
Proposed Self-employed Work Account Premium Rates
Improved scheme performance allows ACC to consult on a reduction in the average self-employed work account premium rate. Currently the average gross rate is $2.20, but this is discounted to $1.85 on average. The new average rate proposed is $1.54 per $100 of liable earnings-17% less than the effective rate.
The Self-employed Work Account pays for the costs associated with the work related personal injuries of those self-employed people and private domestic workers who are insured with ACC. Their non-work injuries are funded by the Earners' Account. The earner premium has already been set for the year starting 1 April 2000 at $1.08 (including G.S.T.) per $100 of liable earnings.
The Accident Insurance Act 1998 requires that self-employed work premiums be calculated on a full funded basis and are to include a competitive neutrality component.
Full funding means that ACC needs to collect enough money in 2000 to meet all the current and future costs of the injuries that occur in 2000.
The Minister for Accident Insurance is required to issue a policy direction on competitive neutrality, for incorporation in the Self-employed Work Account premiums from 1 July 2000. On 13 December 1999 the Minister issued a policy direction that the competitive neutrality portion is to be a nil amount.
Full details of the premium rates are set out in a discussion paper (which includes the proposed regulations). These regulations provide an income benefit portion rate and a non-income portion rate for each of the 538 classifications.
A copy of the discussion paper and actuarial premium assessment are available by writing to:
Self-employed Work Account Premium Consultation, ACC, P.O. Box 242, Wellington, or by contacting the ACC Business Service Centre on telephone No. 0800 222 776.
Copies of the discussion paper are available from ACC's website: www.acc.co.nz
Submissions close at 5pm on Thursday 2 March 2000.