Proposed structural changes at icare are expected to get underway on October 8, a spokesperson for the NSW insurer tells insuranceNEWS.com.au. 

An Operational Expenditure Review of icare undertaken by NSW Treasury has detailed 14 findings aimed at aimed at reducing the state insurer’s cost of service by 5%. 

“We welcome the opportunity to build on our track record of transformation, working closely with government to address the recommendations. icare will continue to work to realise cost savings and efficiencies ... internal work has identified initiatives that will deliver a more than 5% reduction in ongoing core operating expenses,” the spokesperson said. 

The Treasury review says it is “addressing a difficult legacy of accountability, governance and culture” and transformation "will require proactive management”. It says NSW Treasury, icare and the State Insurance Regulatory Authority need to work together on a reporting framework that promotes greater accountability. 

It also acknowledged icare’s work over the past three years to improve efficiency and governance, and says its “operational expenditure has been managed responsibly over the recent past”. 

The NSW Treasury findings aim to improve how the workers’ compensation system is overseen. 

 “It’s a necessary step to restore confidence in icare,” Work Health and Safety Minister Sophie Cotsis said. “This review provides a road map to drive greater transparency, accountability and focus on operational efficiency across icare and the state’s insurance system.”  

NSW is amending the State Insurance and Care Governance Act 2015 to “lift accountability and transparency” of icare’s business performance. Under the bill, icare’s CEO will no longer sit on the board, and the secretary of the Treasury Department will join the board. Board appointments of CEOs will require ministerial approval.  

icare, which serves about 4 million workers with more than 80,000 claims each year, is searching for a new CEO after the departure of Richard Harding in July.   

It is talking with union representatives and staff over plans to save about $23 million a year, and insuranceNEWS.com.au understands about 130 jobs could be affected. icare has about 1800 employees. 

Ms Cotsis has written to icare chair John Robertson seeking advice on how the review findings will be addressed.

See the Operational Expenditure Review here.