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Legislative Assembly for the ACT: 2003 Week 3 Hansard (13 March) . . Page.. 1096 ..

Because of concerns about the immaturity of data on which the earlier estimates were based, and the discovery of data inaccuracies, to date the Government has not introduced a levy on employers to cover the costs of HIH claims.

(b) How does the actual settlement amounts compare with HIH's own original estimates at the time of the collapse;

The Fund actuary advises that HIH provided total case estimates of $26.6 million. It is not possible to compare this with the total of actual settlement amounts until all cases are settled, but at this point the Fund's actuarial estimate of the expected total liability is $38.8 million.

The Fund actuary has advised that there is some evidence that HIH case estimates may have been affected by retardation in claim payments in the lead up to the HIH Group collapse, or a containment of cases estimates, which is not an unusual occurrence in finically distressed insurance companies.

It is not possible to provide information about each individual case estimate prepared by HIH and how this would compare with those cases that have actually been settled to date, as this would involve an inordinate use of Departmental and WorkCover resources.

(c) Given the Minister's admission on 20 November that the actuarial report was prepared on less than complete data, how reliable are these figures included in the annual accounts.

As discussed in the answer to question 1(a), the Fund actuary advises that the earlier estimates of $64 million and $55 million were affected by inaccurate data. Once the problems were identified, action was taken by the Fund Manager and the Supervising Insurer to rectify the problems.

The current estimate of liability is $38.8 million, and future accounts and financial statements will include this updated figure. As time progresses, estimates of liability will be informed by further claims development and experience. Therefore, it is possible that the estimates will require further revision in future to ensure that accounts and financial statements represent the most accurate estimates available at the time.

(3) Administration Expenses (Page 106):

Administration expenses associated with the Supplementation Fund total $601,322 (or $639,316 on page 108).

(a) How many staff does this expense cover and is this not high compared with insurance industry average workloads, given that there is also the involvement of a supervising insurer;

I am not able to comment on the costs included in the insurance industry averages referred to in the question, but I am advised that the $601,322 identified as 'administrative expenses' in the Statement of Financial Performance at page 106 of the

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