Media release

21 December 2010

ACC set to be handed over to private insurers

The Government’s ‘in principle’ decision to privatise the work account of ACC comes at a time when the Minister for Earthquake Recovery has acknowledged the shortcomings of private insurers in Canterbury.

“There is no justification to privatise because the work account is in good financial order,” said ACC Futures spokesperson Hazel Armstrong. Treasury acknowledges that it is “performing better than it was when competition was introduced in 1999”.

“The expansion of the Accredited Employers Programme (AEP) will see the expansion of the use of Third Party Administrators, because most of the new employers will not have the capacity to provide case management,” said Armstrong. “Research conducted on behalf of ACC demonstrated that TPAs have the worst client satisfaction record coming in well behind employers who directly manage their own claims and ACC itself*.”

“Concern that making it easier for employers to enter the AEP will mean that less attention will be paid to things such as their commitment to injury prevention. We are of the view that the sound basis of the work account is partly down to the positive impact of the Health and Safety in Employment Act amendments of 2002 which established elected health and safety reps and health and safety committees.”

“When you involve both private insurance underwriting and third party administrators you make it clear that the ‘client’ is the employer, not the injured worker. If people think things are bad at the moment in terms of claims being turned down, just wait until the private sector gets their hands on it. The techniques that ACC is being justifiably criticised for at the moment are essentially private insurance techniques.”

Contact: Hazel Armstrong : 027 472 1793

Notes:  * Partnership Programme - Injured employees’ satisfaction with the service they received (Feb- June 2010),Research New Zealand, for ACC.

02:54PM Tuesday, 21 December, 2010