The ACC Board has recommended to the Minister for Accident Insurance, a number of changes to premium and levy rates for the 2002/03 premium year. The recommended rates reflect:
? the latest claims experience;
? recent cost trends in each scheme; and
? the additional funding requirements for the increased range and scope of benefits included in the new ACC legislation
(the Injury Prevention, Rehabilitation and Compensation Act), which comes into effect from 1 April 2002.
The ACC Board's recommendations are not binding on the Minister, who will need further advice from officials and actuaries. She may accept, reject or modify the Corporation's recommendations.
The recommended rates, excluding G.S.T. are as follows:
Employers' Account (workers' compensation)
ACC recommends a 6% price decrease - reducing the average premium from $0.85 per $100.00 of payroll to $0.80. This rate reflects the cost reductions ACC has achieved as a consequence of better injury prevention in the workplace and more effective rehabilitation. The recommended premiums also provide for the additional range and scope of benefits being introduced with the Injury Prevention, Rehabilitation and Compensation Act 2001.
The Board has also made some minor recommendations about the application of its discount structures. Revenue from standard employers (i.e. excluding those in the Partnership Programme) is estimated to be $322.8 million at the new rates.
Self-employed Work Account
The ACC Board recommends an increase in the average premium rate for self-employed - up 25% from the current average of $1.35 to $1.69 per $100.00 of liable earnings. The increase in the average rate is the direct result of increasing claim numbers from accidents involving the self-employed (especially farmers), the increased costs of benefits and scheme operation and the additional range and scope of benefits being introduced with the Injury Prevention, Rehabilitation and Compensation Act 2001. Although the average increase is 25%, some rates for sectors where the injury rate has increased more substantially
(e.g. most farming groups) the premium increase proposed would be in the order of 40%.
Revenue from the self-employed is estimated to be $109.8 million.
Earners' Account (providing cover for non-work injuries)
The ACC Board recommends prices remain unchanged at $1.10 (G.S.T. inclusive) per $100.00 of earnings. The additional range and scope of benefits being introduced with the Injury Prevention, Rehabilitation and Compensation Act 2001 can be absorbed within the recommended pricing level.
Revenue from earners is estimated to be $565.8 million.
Motor Vehicle Account (injuries involving motor vehicles)
The ACC Board has recommended that the ACC portion of the annual motor vehicle licence fee be - increased by 13% to $145.00 per standard vehicle (currently $128.45). The increase is largely due to the higher costs now incurred on rehabilitating those seriously injured in motor vehicle accidents, as well as the additional range and scope of benefits being introduced with the Injury Prevention, Rehabilitation and Compensation Act 2001.
It also recommends that:
? the previously exempt service vehicles (i.e. ambulances, fire brigade vehicles, and hearses) be charged the full standard vehicle rates for 2002/03. Police have always paid the standard vehicle rate;
? an additional premium be levied on non-petrol vehicles - the levy proposed is equivalent to the petrol excise duty paid by other road users. This addresses a funding inequity between petrol and non-petrol vehicle owners and results in an additional annual premium for non-petrol trucks of $35.00 and $25.00 for non-petrol cars; and
? the motor cycle premium differential be increased from 105% to 150% of the class 2 rate for standard vehicles. This change will still only partially fund the cost of accidents to motorcyclists - they will only be funding 35% of the costs of injuries they incur.
Revenue from motor vehicle licence fees is estimated to be $368.74 million.
Residual Claims Account
The ACC Board recommends that the average residual claims levy remains at $0.35 per $100.00 of earnings.
This levy funds the ongoing costs of injuries that occurred prior to 1 July 1999.
Revenue from the residual claims levy is estimated to be $190.3 million.
ACC's recommendations can be summarised as follows:
Account Current Recommended Current Recommended Recommended
2001/02 2002/03 2001/02 2002/03 Changes
Employers' $0.85 $0.80 - - -6%
Self-employed Work $1.35 $1.69 - - +25%
Earners' $0.93 $0.95 $0.05 $0.03 0%
Motor Vehicle $65.80 $79.00 $62.65 $66.00 +13%
Residual Claims - - $0.35 $0.35 0%
*All premiums and levies quoted are exclusive of G.S.T. (The Earners' Account rates have been rounded).
Individual rates will be finalised and incorporated into draft regulations once the base rates have been set by the Minister.
Copies of the detailed recommendations made to the Minister may be obtained by contacting ACC on (04) 918 7923 or by email: firstname.lastname@example.org