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icare nominal insurer scheme lost $1.87 billion, inquiry told

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The icare Nominal Insurer workers’ compensation scheme had a net loss of $1.873 billion last financial year, Treasury Deputy Secretary Phil Gardner told a NSW Parliamentary committee last week.

Mr Gardner, who also said the scheme had an underwriting loss of $2.274 billion, was questioned over whether the loss was due to an investment performance deterioration or a cost increase.

“icare advised us that a little over a billion of that is due to COVID-19. I do not have numbers on the balance, but I presume it is a range of investment,” he says in a transcript of the hearing.

Mr Gardner said the Treasury Managed Fund’s net loss was $635 million, after $2 billion was provided from Treasury at the end of June.

The NSW Parliamentary committee is holding inquiries as part of a scheduled two-year review, while the State Government has also brought forward a five-year inquiry that will include the performance of the workers’ compensation scheme and regulatory arrangements.

Terms of reference for the inquiry, to be conducted by retired Supreme Court judge Robert McDougall, were released last week.

NSW Treasury Secretary Michael Pratt says the department has no formal role over the management of the Nominal Insurer scheme, but legislative oversight is set to be looked at as part of the review.

He says the State Insurance Regulatory Authority also suggested it did not have sufficient power and authority.

“Equally I could argue at the end of the day the Nominal Insurer is funded by business and serving private sector employees, so should it be privatised?” he told the committee.

“These are all issues that I am encouraging the McDougall report – when that gets underway – [to] be looking at.”

The NSW Government last week said John Robertson, a former NSW state Labor Party leader and COO of charity Foodbank, will take over as icare Chairman from September 25.

Current Chairman Michael Carapiet and Deputy Chairman Gavin Bell are both retiring from the board amid wider changes.