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Legislative Assembly for the ACT: 2005 Week 04 Hansard (Thursday, 17 March 2005 2005) . . Page.. 1138 ..

That this bill be agreed to in principle.

This bill provides a necessary overhaul of the Insurance Authority Act 2000 arising from several factors. First, the insurance crisis has revealed a need to make adjustments to the act to provide the ACT Insurance Authority with a more robust, yet flexible, administrative platform. Secondly, the act contains a series of anomalies and inconsistencies that need to be removed. Thirdly, the 2003 bushfire outcomes provided useful evidence of the need to strengthen the authority’s access to agency data and other information with respect to claims management.

The changes that have been included in this bill provide for the authority’s administrative structure to be more aligned with Treasury, similar to the central financing unit and the superannuation unit. The authority is an important element of the territory’s fiscal tools and better alignment will enable more effective control from a broader territory perspective.

The ACT Insurance Authority commenced operation in April 2001. The authority is a captive insurer; it provides insurance cover to ACT government entities only and it secures reinsurance from global underwriters. The functions of the insurance authority are set out in its legislation and these will not change as a result of the bill presented here.

These functions are to carry out the business of insurer of territory risks, which includes taking out reinsurance, satisfying the settling of claims and any other action necessary to protect the territory’s interests; and to develop and promote best practice risk management with the objective of reducing losses by the territory. In my view, the authority has performed these functions admirably during the short period of its existence, especially when one considers that it has had to deal with one of the most significant catastrophes to affect this or any other community in this country—the 2003 bushfire.

Putting the bushfire aside, the authority has taken on significant additional responsibilities since its inception, including a centralised role in claims notification and general claims management in lieu of previous mechanisms, which included agencies, the Government Solicitor and a web-based provider. In addition, the authority has taken on new clients, such as Calvary Hospital and ACTTAB. Additional exposures include medical malpractice claims against VMOs, the incorporation of Totalcare’s assets and operations, and the management of runoff cover in relation to Totalcare claims.

Most significantly, the authority is responsible for the implementation of the government’s enterprise-wide risk management framework, the first such scheme in Australia to apply a consistent, standardised risk management infrastructure across the whole of government. It will allow all agencies to take a uniform approach to assessing, managing and reporting key risks.

Mr Speaker, everyone here knows that the face of government has changed markedly over the last few decades and that accountability is now a key driver in all our actions. Managing risk is a critical part of our day-to-day responsibilities and is absolutely vital

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