Self-insurance in the context of the South Australian return to work scheme means that an employer is granted the ability to fund and manage compensation claims made by its own workforce.
Self-insurance is only possible for organisations that can meet a series of financial criteria and can conform with set standards of work health and safety and return to work management.
In order to be able to determine and manage claims for compensation, the self-insurer has certain powers delegated to it under the legislation. The self-insurer is in effect an insurer in its own right, because it must fund all claims made upon it by its employees. It is also subject to the same review and appeals mechanisms as ReturnToWorkSA and its claims agents.
A self-insurer is still subject to regulatory control by ReturnToWorkSA because under the legislation, ReturnToWorkSA remains the ‘insurer of last resort’. All self-insurers must, among other things:
- Provide a financial guarantee from an approved financial institution to ReturnToWorkSA and pay into the insovency aggregate for a specified period to protect the scheme in the event that a self-insurer is unable to meet its liabilities.
- Pay an administrative fee to ReturnToWorkSA (calculated as a percentage of the premium it would have paid had it not been self insured).
- Carry excess of loss insurance.
Grants of self-insurance are made by a delegate of the Board of ReturnToWorkSA and can not exceed five years. There are various conditions an employer must meet before self-insurance can be granted. After five years, (or whatever lesser period has been granted), the self-insurance grant can be renewed provided the self-insurer continues to meet the various conditions and performance standards.
ReturnToWorkSA has the power to reduce or revoke grants of self insurance where there is a clear failure or refusal to meet the conditions. These events are extremely rare.
For more detail, consult the Code of Conduct for Self Insured Employers on the ReturnToWorkSA website.