Government Continues To Play With Mirrors In ACC
4 December 2001
Government Continues To Play With Mirrors In ACC Premium Setting
Rather than accept ACC recommendations in respect to premium rates for 2002/03, the Government is up to its old tricks of building in further margins says Federated Farmers of NZ (Inc) President Alistair Polson.
"ACC proposed increasing the average Self-Employed Work Account Levy from $1.35 for the current year to $1.69 for 2002/03," said Mr Polson. "The Government today increased the rate even further, to an average of $1.75 for the 2002/03 year citing the need to build up reserves in the account."
"This increase which includes a substantial prudential margin which cannot be justified given that ACC is a state monopoly insurer and does not face competition in the market. Fully-funding claims was meant to encourage premiums rates to be set at a level which reflects the total ongoing cost of claims in the year in the accident occurred.
"While final figures are yet to be released it is likely that a farming couple will face a premium hike of around $600 extra per annum, up from $1,400 to $2,000. This is particularly galling for farmers given that ACC figures given to the Federation's National Council would suggest that their injury rates are falling.
"By building in a significant premium buffer and building up reserves, the Government may well be able to extend the schemes coverage and cost without appearing to do so. This is unacceptable given that most employers and self-employed do not have a choice of switching to alternative accident insurance providers given ACC’s monopoly status," Mr Polson concluded.