The Local Government Association (LGA) of SA has established a subsidiary to oversee its insurance schemes, following an Auditor-General’s report recommending changes.

LGASA Mutual will oversee the mutual liability and workers’ compensation schemes, with long-term insurance provider JLT contracted to run day-to-day operations.

“Across both schemes, savings of $4.6 million are predicted over the next three years, and $43.4 million over the coming decade,” LGA CEO Matt Pinnegar said.

A skills-based board will work with JLT, and the structure is expected to be operational by September. Member benefits will be applied from the start of this financial year.

JLT Public Sector Global Head Leo Demer says organisation of the schemes dates back to the 1980s and change is due.

“It is a modernisation of the arrangements, and it will be more efficient, ” he told insuranceNEWS.com.au.

The LGA says the schemes, set up when councils found it difficult to secure insurance through traditional providers, have saved the sector more than $500 million over the past 20 years.

The group reviewed the schemes after the Auditor-General’s report in 2015.

All SA councils are voluntary members of the mutual liability and workers’ compensation schemes. JLT provides insurance services to more than 500 councils across Australia.

“When we aggregate all the schemes we look after for local government, it would be more than $2 billion that would have been saved over the past 20 years,” Mr Demer said.