The National Insurance Brokers Association (NIBA) has taken issue with NSW state insurer icare over proposed changes to letters of appointment used in the workers’ compensation scheme.

The letters are used to confirm an employer has appointed a broker as their authorised delegate for their workers’ insurance, but NIBA says it has raised concerns with icare over obligations included in the updated version.

“In particular, it is unclear how insurance brokers can provide an undertaking to comply with all privacy and health obligations that apply to the employer,” NIBA CEO Dallas Booth said.

“This undertaking appears to be far too wide and NIBA has expressed willingness to be consulted further regarding this.”

The updated letter is effective immediately on all new appointments while the change will need to be made by the end of the year for all existing policies that currently receive a cost of claims report.

The NSW workers’ compensation and state privacy legislative regimes place strict obligations on how insurers share information with third parties, icare says.

"To ensure that icare, acting on behalf of the Workers' Compensation Nominal Insurer, remains compliant with its legislative obligations, icare/the Nominal Insurer requires employers and brokers acting on their behalf to agree to the terms in this letter of appointment," a spokeswoman told insuranceNEWS.com.au.

"icare is aware of the concerns raised by NIBA and is actively working to address these."