{"id":"nsw:sl-2010-0266","name":"Insurance Premiums Order (Retro-Paid Loss Premium Method) 2010–2011","slug":"insurance-premiums-order-retro-paid-loss-premium-method-2010-2011","collection":"regulation","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"266 of 2010","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":178270,"registerId":"nsw-nsw:sl-2010-0266-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name of Order","content":"#### 1 Name of Order\n\n1 Name of Order\n\n> This Order is the [Insurance Premiums Order (Retro-Paid Loss Premium Method) 2010–2011](/view/html/inforce/current/sl-2010-0266).","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> This Order commences at 4 pm on 30 June 2010 and is required to be published in the Gazette.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Interpretation","content":"#### 3 Interpretation\n\n3 Interpretation\n\n> > (1) In this Order, words and expressions have the same meanings as they have in the General Order, unless this Order provides otherwise.\n> \n> > (2) In this Order:\n> > \n> > adjustment date, in relation to a policy of insurance, means each of the following dates:\n> > \n> > > (a) the date that is 15 months after the date of the commencement of the period of insurance (the first adjustment date),\n> > \n> > > (b) the date that is 24 months after the date of the commencement of the period of insurance (the second adjustment date),\n> > \n> > > (c) the date that is 36 months after the date of the commencement of the period of insurance (the third adjustment date),\n> > \n> > > (d) the date that is 48 months after the date of the commencement of the period of insurance (the fourth adjustment date),\n> > \n> > > (e) the date that is 60 months after the date of the commencement of the period of insurance (the fifth adjustment date).\n> > \n> > cost of claims has the same meaning as in Division 4 of Part 20 of the [Workers Compensation Regulation 2003](/view/html/repealed/current/sl-2003-0628).\n> > \n> > General Order means:\n> > \n> > > (a) the [Insurance Premiums Order 2010–2011](/view/html/inforce/current/sl-2010-0265), or\n> > \n> > > (b) if no such order has been made, the [Insurance Premiums Order 2009–2010](/view/html/inforce/current/sl-2009-0229).\n> \n> > (3) The explanatory note does not form part of this Order.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Application of Order","content":"#### 4 Application of Order\n\n4 Application of Order\n\n> > (1) This Order applies only to and in respect of policies of insurance for employers to whom the optional alternative method of calculating premiums under section 168A of the Act applies (retro-paid loss premium policies).\n> \n> > (2) This Order applies to and in respect of retro-paid loss premium policies that are to be or have been issued or renewed so as to take effect on or after 4 pm on 30 June 2010 and before 4 pm on 30 June 2011.\n> \n> > (3) If, before 4 pm on 30 June 2011, an insurance premiums order that applies only to and in respect of retro-paid loss premium policies has not been made in respect of such policies of insurance taking effect on or after that time, this Order applies to and in respect of those policies pending the making of such an order.\n> \n> > (4) The General Order (other than clauses 3 and 4) applies to and in respect of retro-paid loss premium policies, unless this Order provides otherwise.\n> \n> > (5) This Order does not apply to a policy of insurance issued or renewed by a specialised insurer that is exempted from insurance premiums orders by clause 147 of the [Workers Compensation Regulation 2003](/view/html/repealed/current/sl-2003-0628).","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Classification of large employers","content":"#### 5 Classification of large employers\n\n5 Classification of large employers\n\n> A large employer within the meaning of the General Order is classified a large employer under this Order.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Retro-Paid Loss Premium Method of premium calculation","content":"#### 6 Retro-Paid Loss Premium Method of premium calculation\n\n6 Retro-Paid Loss Premium Method of premium calculation\n\n> For the purposes of section 168A of the Act, the alternative method is to calculate the premium for a policy of insurance at the commencement of the period of insurance (the deposit premium), and then recalculate the premium at each adjustment date (the adjusted premium), in accordance with this Order.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Minimum premium","content":"#### 7 Minimum premium\n\n7 Minimum premium\n\n> Despite any other provision of this Order, a deposit premium and an adjusted premium in respect of any policy of insurance is to be no less than $175.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Calculation of required deposit: section 172A of Act","content":"#### 8 Calculation of required deposit: section 172A of Act\n\n8 Calculation of required deposit: section 172A of Act\n\n> > (1) The required deposit for an employer in relation to a policy of insurance is to be calculated in accordance with the following formula:\n> > \n> > > (a) before the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0266)%20AND%20(Year%3D2010)%20AND%20(%22Historical%20Document%22%3D0))/g1.gif)\n> > \n> > > (b) on and from the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0266)%20AND%20(Year%3D2010)%20AND%20(%22Historical%20Document%22%3D0))/g2.gif)  \n> > > where:\n> > > \n> > > RD is the required deposit in respect of the period of insurance to which the policy relates.\n> > > \n> > > Pmax is the maximum premium that is payable by the employer calculated in accordance with Schedule 1.\n> > > \n> > > PD is the deposit premium payable by the employer calculated in accordance with Schedule 1.\n> > > \n> > > P is the premium payable by an employer for a policy of insurance calculated in accordance with Schedule 1.\n> \n> > (2) However, if the employer is a member of a group, subclause (1) does not apply and the required deposit for an employer in relation to a policy of insurance is to be calculated in accordance with the following formula:\n> > \n> > > (a) before the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0266)%20AND%20(Year%3D2010)%20AND%20(%22Historical%20Document%22%3D0))/g3.gif)\n> > \n> > > (b) on and from the first adjustment date:\n> > > \n> > > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0266)%20AND%20(Year%3D2010)%20AND%20(%22Historical%20Document%22%3D0))/g4.gif)  \n> > > where:\n> > > \n> > > RD is the required deposit in respect of the period of insurance to which the policy relates.\n> > > \n> > > PGmax is the maximum premium that is payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PGd is the deposit premium payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PEd is the deposit premium that is payable by the employer who is a member of a group calculated in accordance with Schedule 2.\n> > > \n> > > PG is the group premium payable by the members of the group in respect of the period of insurance to which the group’s policies relate calculated in accordance with Schedule 2.\n> > > \n> > > PE is the premium for the time being payable by an employer who is a member of a group in respect of the period of insurance to which the policy relates (including, where adjustments are required to be made to that premium by reason of the operation of this Order, the premium so payable by reason of those adjustments).","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Schedules form part of Order","content":"#### 9 Schedules form part of Order\n\n9 Schedules form part of Order\n\n> Schedules 1–4 form part of this Order.","sortOrder":8},{"sectionNumber":"Schedule 1","sectionType":"schedule","heading":"Method of calculation of deposit premium and adjusted premium—general","content":"# Schedule 1 Method of calculation of deposit premium and adjusted premium—general\n\nSchedule 1 Method of calculation of deposit premium and adjusted premium—general\n\n(Clause 8)","sortOrder":9},{"sectionNumber":"Schedule 2","sectionType":"schedule","heading":"Method of calculation of deposit premium and adjusted premium—member of a group","content":"# Schedule 2 Method of calculation of deposit premium and adjusted premium—member of a group\n\nSchedule 2 Method of calculation of deposit premium and adjusted premium—member of a group\n\n(Clause 8)","sortOrder":12},{"sectionNumber":"Schedule 3","sectionType":"schedule","heading":"Experience adjustment factor","content":"# Schedule 3 Experience adjustment factor\n\nSchedule 3 Experience adjustment factor\n\n(Schedule 1, clause 2 and Schedule 2, clause 6)","sortOrder":19},{"sectionNumber":"Schedule 4","sectionType":"schedule","heading":"Claims adjustment factor","content":"# Schedule 4 Claims adjustment factor\n\nSchedule 4 Claims adjustment factor\n\n(Schedule 1, clause 2 and Schedule 2, clause 6)\n\nGeneral\n\nThe claims adjustment factor for an employer (“V”) (or for a group (“VG”)) at the adjustment date set out in Column 1 of the Table to this clause is, if the employer has (or all the members of the group of employers of which the employer is a member have) elected a large claim limit for the purposes of clause 137 (5) of [Workers Compensation Regulation 2003](/view/html/repealed/current/sl-2003-0628) of:\n\n> (a) $350,000—the factor set out in Column 2 of the Table corresponding to that date, and\n\n> (b) $500,000—the factor set out in Column 3 of the Table corresponding to that date.\n\nTable\n\n| Column 1 | Column 2 | Column 3 |\n| Adjustment date | Adjustment factor “V” (or “VG”) for $350,000 large claim limit | Adjustment factor “V” (or “VG”) for $500,000 large claim limit |\n| First adjustment date (being commencement of policy period plus 15 months) | 3.05 | 2.95 |\n| Second adjustment date (being commencement of policy period plus 24 months) | 2.10 | 2.00 |\n| Third adjustment date (being commencement of policy period plus 36 months) | 1.80 | 1.70 |\n| Fourth adjustment date (being commencement of policy period plus 48 months) | 1.75 | 1.67 |\n| Fifth adjustment date (being commencement of policy period plus 60 months) | 1.75 | 1.67 |","sortOrder":23}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":true,"description":"This Order narrows and specifies the premium‑calculation regime for employers using the retro‑paid loss premium method under section 168A: it applies only to such policies taking effect from 4 pm 30 June 2010 up to before 4 pm 30 June 2011 (with a temporary fallback if no successor order is made) and provides bespoke formulas, group rules and timed adjustment mechanics that override parts of the General Order for those policies (see clauses 4, 6–9)."},"complexity_factors":["Multiple interlocking numerical formulas for deposit and adjusted premiums (clause 8; Schedule 1) increase implementation complexity.","Separate group‑member calculation paths with three options and aggregated group metrics (Schedule 2, clauses 2–6) add branching logic and allocation questions.","Experience adjustment and claims adjustment factors that vary by adjustment date create time‑dependent multipliers (Schedules 3–4 and Schedule 4 Table).","Five discrete adjustment dates (15, 24, 36, 48, 60 months) require ongoing tracking and recalculation (clause 3(2); Schedules 1–4).","Caps and floors (Pmin, Pmax, PGmin, PGmax) and a statutory minimum premium ($175) impose constraints that interact with formulas (clause 7; Schedule 1 & 2).","Numerous defined terms and cross‑references to the General Order and Workers Compensation Regulation require reading multiple instruments (clause 3(1); clause 4(4)).","Actuarial inputs (cost of claims, basic tariff premium, experience factors, large‑claim limits) mean reliance on accurate claims data and classification (Schedules 1–4).","Administrative and compliance burden on insurers and employers to compute, notify and reconcile adjusted premiums across adjustment dates and groups (clauses 6–8; Schedules)."],"plain_english_summary":"This Order sets the mechanical rules for calculating workers‑compensation \"retro‑paid loss\" insurance premiums for employers eligible under section 168A. It prescribes how insurers compute an initial deposit premium and how premiums are recalculated at five scheduled adjustment dates, includes separate group‑member methods and caps/floors (including a $175 minimum), and fixes time‑dependent claims adjustment multipliers. Employers pay the resulting premiums; insurers apply the formulas; the adjustment regime shifts timing of cashflows and risk allocation. (See clauses 4, 6–8, Schedules 1–4.)"},"kimi_summary":{"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":false,"description":"This Order appears tightly scoped to its original purpose: implementing the retro-paid loss premium method for the 2010–2011 financial year. It does not expand beyond the specific alternative calculation mechanism authorised by section 168A of the Workers Compensation Act. The detailed schedules, temporal limitations (30 June 2010 to 30 June 2011), and specific reference to the 'General Order' suggest this is a narrow, technical instrument rather than scope creep."},"complexity_factors":["Extensive mathematical formulas with multiple variables (19+ defined algebraic symbols across Schedules)","Nested cross-references to the 'General Order' (Insurance Premiums Order 2010–2011) and the Workers Compensation Regulation 2003","Dual calculation tracks: one for individual employers and one for group members with three distinct 'Options'","Five separate adjustment dates triggering different calculation methods and different claims adjustment factors","Conditional logic throughout: 'if the employer is a member of a group', 'if CG = 0', 'where the period of insurance...is not 12 months'","Multiple defined terms with compound definitions (e.g., 'adjustment date' has five sub-definitions; 'General Order' has a fallback clause)","Schedules 3 and 4 contain lookup tables and formulaic calculations that must be cross-referenced back to Schedules 1 and 2","Embedded images/formulas in the text that cannot be parsed as plain text (represented as ![](/image/...) references)","Temporal complexity: different formulas apply 'before the first adjustment date' versus 'on and from the first adjustment date'","Exception clauses: clause 7 creates a floor minimum despite 'any other provision', and clause 4(5) exempts specialised insurers"],"plain_english_summary":"This Order sets out a special way to calculate workers compensation insurance premiums for certain large employers in New South Wales who choose an alternative payment method called the \"retro-paid loss\" system.\n\n**What it does:**\nInstead of paying a fixed premium upfront, employers using this method pay a **deposit premium** when the policy starts, then have their premium recalculated up to five times over five years based on their actual claims costs. This means their final premium depends on how many workplace injuries actually occur and how much those claims cost.\n\n**Who it affects:**\n- Large employers who opt into this alternative premium calculation method under section 168A of the Workers Compensation Act\n- Employers who are members of corporate groups (which have their own special calculation rules)\n- Policies issued or renewed between 30 June 2010 and 30 June 2011\n\n**How the calculations work:**\n- **Deposit premium**: An initial estimate based on the employer's basic tariff rate and experience history\n- **Adjusted premiums**: Recalculated at 15, 24, 36, 48, and 60 months after the policy starts\n- The formulas factor in actual claims costs, with different \"claims adjustment factors\" depending on whether the employer has chosen a $350,000 or $500,000 limit on individual large claims\n- Premiums are capped with minimum and maximum amounts to protect employers from extreme fluctuations\n\n**Key features:**\n- **Minimum premium**: No employer pays less than $175\n- **Required deposits**: Employers must lodge security deposits calculated as a percentage of their potential premium liability\n- **Group options**: Members of corporate groups can choose between three different calculation methods (Options 1, 2, and 3)\n- **Exclusions**: Specialised insurers exempted under the Workers Compensation Regulation are not covered\n\n**Why it matters:**\nThis system gives large employers with good safety records the chance to benefit from lower premiums if their actual claims costs are lower than expected. However, it also exposes them to higher costs if they have more workplace injuries than anticipated. It represents a risk-sharing arrangement between insurers and employers, moving away from fixed premiums toward premiums based on actual experience."},"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"Based on the available information, the instrument appears to operate as intended — a routine annual premium-setting order for the Retro-Paid Loss Method within the NSW workers' compensation scheme. There is no evidence of scope creep or deviation from its original purpose. These orders are typically remade each year with updated figures, following an established pattern."},"complexity_factors":["Highly technical actuarial and insurance pricing methodology that requires specialist knowledge to fully understand","Retrospective premium adjustment mechanism creates a multi-stage calculation process that is inherently complex","Sits within the broader NSW workers' compensation regulatory framework, requiring cross-referencing with other legislation and orders","Targeted at a narrow but sophisticated audience (large employers, insurers, actuaries), so assumes significant background knowledge","The actual substantive content (formulas, tables, thresholds) is not present in the provided extract, making full analysis impossible","Time-limited instrument (2010–2011 only) that interacts with policy renewal cycles and retrospective adjustment periods spanning multiple years"],"plain_english_summary":"This NSW order sets the rules for calculating workers’ compensation premiums under the Retro‑Paid Loss Premium Method for 2010–2011 — a retrospective pricing option where large employers pay a base premium later adjusted to actual claims. It affects opting large employers, WorkCover NSW, licensed insurers, and advisers, and matters because it can cut costs for low‑claim employers but creates post‑year financial uncertainty. The extract provided contains little substantive detail."}},"importantCases":[],"_links":{"self":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011","history":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011/history","analysis":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011/analysis","conflicts":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011/conflicts","importantCases":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011/important-cases","documents":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2010-2011/documents"}}