The majority of jurisdictions require an applicant for a self-insurance licence to meet a minimum standard for work health and safety and rehabilitation. In determining the minimum standard required for work health and safety, most agencies require the employer to have in place a work health and safety management system or other similar arrangements (i.e. Victoria, the Northern Territory, the Australian Capital Territory and the Commonwealth). These are then audited against a work health and safety audit tool (see Table 7.4).

Victoria, Tasmania and the Commonwealth measure the self-insurer’s performance against the National Self-Insurers OHS Audit Tool and audits of rehabilitation and claims management systems. After two years in the scheme, the Commonwealth requires entities to demonstrate, on an ongoing basis, how they have maintained these management systems.

Queensland requires satisfactory work health and safety performance. Although no audit tool is stipulated in legislation, the administrative guidelines indicate that use of the national OHS Audit Tool is required. In South Australia compliance is required with the Self-insurer Standards at Annexure A to the Code, with multi-jurisdictional self-insurers able to elect to be audited against the national audit tool.

In addition to the prudential requirements, employers are required to take out bank guarantees or similar guarantees to cover outstanding claims liabilities. Self-insurers are also required to carry excess of loss insurance to cover catastrophic events. Table 7.5 shows the guarantee requirements for self-insurance eligibility requirements across Australia.

Jurisdictions vary in the extent of self-insurance licence coverage from single companies to fully owned subsidiaries. Table 7.6 details restraints on company structure.

Normally self-insurers case-manage their own employees; however some jurisdictions allow them to outsource this function. Table 7.7 shows the outsourcing of case management arrangements across Australia.

Self-insurer companies are obliged to comply with workers’ compensation legislation to at least the same extent as premium-paying companies to maintain their self-insurer status. Licensees may have extra conditions imposed on them which also require compliance measures. Table 7.8 details other ongoing licence requirements.

Reporting requirements

Self-insurance lends itself to self-regulation, providing that adequate control measures are put in place from the outset and a continuous reporting programme is followed. Periodic reporting can be used to monitor performance with the degree of auditing linked to a self-insurer’s performance. Table 7.9 shows the reporting requirements across Australia.

Requirements for surrendering license and penalties for exiting the scheme

Self-insurance is not without risk, the predominant one being that if self-insurers fail, then governments may have to meet the costs of workers’ compensation liabilities. Employers may, for a range of reasons, wish to cease being a self-insurer. Some jurisdictions impose penalties on employers who choose to leave their scheme or surrender their self-insurance licence and move to the Comcare scheme. See Table 7.10 for a comparison of these requirements and penalties.