A scathing examination into Victoria’s WorkSafe claims processing has revealed some embarrassing failures by insurers and other claims agents and raised more questions over the sacking of GIO from the agent panel last month.

GIO and QBE where the only two on the six-member panel to be commended for their reporting processes while CGU, Allianz, Xchanging and Gallagher Bassett’s files were reported to be in “a state of disorder”.

Ombudsman George Brouwer says complaints regarding WorkSafe and its agents have grown over the past three years from 246 in 2007/08 to 312 in 2009/10. More than 289 have been received so far this year.

He says complaints mainly centred around people having to continually submit the same documentation to their agents, leading to delays in service.

Investigations showed CGU, who has the largest share in WorkSafe claims at 29.5%, had demonstrated a “total disregard” for file management.

Files were stored on the tops of cabinets and his officers found some files had loose documents, torn covers and were overflowing with paper.

The report says complaints from injured workers, employers and service providers had rarely been recorded on claim files, “if at all”.

Mr Brouwer says although Allianz, Xchanging and CGU had assured his officers that written complaints were kept on file after they were actioned, further investigations found this was not the case.

Mr Brouwer says poor record-keeping enabled the WorkSafe incentive schemes to be misused.

CGU had manipulated the incentive for timely payments by not processing more than 10,000 claims on receipt but has since been fined $2.8 million.

“This manipulation of incentive measures, a practice referred to as ‘gaming’ by WorkSafe and its agents, is clearly improper,” Mr Brouwer said.

Investigations also revealed that two envelopes of overdue accounts had been found on the desk of a former manager who had resigned.

The report says some account payments were either filtered or siphoned through the CGU accounts area at a rate of about 200 a week to ensure it continued to meet its timeliness measures.

A manager had instructed this should happen, and further investigations found several other people involved in these hidden accounts. Two employees have since been sacked.

CGU spokesman Sean Sampson says the insurer identified the issue and immediately informed WorkSafe before undertaking an extensive review.

“We have implemented remedial actions as a result so this doesn’t happen again and have kept Worksafe informed throughout this process,” he told insuranceNEWS.com.au.

“There was no impact on employers or injured workers as a result of this issue.”

A WorkSafe spokesman says many of the issues identified by the report have already been addressed or are in the process or being dealt with.

“While managing millions of documents and around 56,000 active claims each year is never easy in a system like ours, we recognise there is room for improvement,” he said.