{"id":"nsw:sl-2014-0312","name":"Insurance Premiums Order (Retro-Paid Loss Premium Method) 2014–2015","slug":"insurance-premiums-order-retro-paid-loss-premium-method-2014-2015","collection":"regulation","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"312 of 2014","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":177877,"registerId":"nsw-nsw:sl-2014-0312-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) 2014–2015](/view/html/inforce/current/sl-2014-0312).","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 2014 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 relevant 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> > cost of claims has the same meaning as in Division 4 of Part 18 of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037).\n> > \n> > relevant General Order means:\n> > \n> > > (a) the [Insurance Premiums Order 2014–2015](/view/html/inforce/current/sl-2014-0311), or\n> > \n> > > (b) if no such order has been made, the [Insurance Premiums Order (January–June) 2014](/view/html/inforce/current/sl-2013-0622).","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 at or after 4 pm on 30 June 2014 and before 4 pm on 30 June 2015.\n> \n> > (3) If, before 4 pm on 30 June 2015, 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 at 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 relevant 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 165 of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037).","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 relevant General Order is classified as 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> 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) on or before the third adjustment date:\n> > \n> > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0312)%20AND%20(Year%3D2014)%20AND%20(%22Historical%20Document%22%3D0))/g1.gif)\n> \n> > (b) after the third adjustment date:\n> > \n> > ![](/image/((Type%3D%22subordleg%22)%20AND%20(No%3D0312)%20AND%20(Year%3D2014)%20AND%20(%22Historical%20Document%22%3D0))/g2.gif)\n> \n> where:\n> \n> RD is the required deposit in respect of the period of insurance to which the policy relates.\n> \n> T is the basic tariff premium for the employer, calculated with respect to the period of insurance in accordance with the relevant General Order.","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","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","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 4)","sortOrder":17},{"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 4)\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 154 (5) of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037) 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 |","sortOrder":21}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"Based on the available information, this instrument appears to have remained consistent with its original intent — establishing the rules for the Retro-Paid Loss Premium Method for the 2014–2015 insurance year. There is only one version in existence (from 30 May 2014) with no amendments recorded, indicating no scope change occurred."},"complexity_factors":["Highly technical actuarial and insurance premium calculation methodology (retro-paid loss formulas)","Specialist workers compensation regulatory context requiring knowledge of the broader NSW workers compensation legislative framework","Applies only to a narrow class of large employers who opt into this premium method, limiting general accessibility","Annual instrument tied to a specific policy year (2014–2015), meaning historical context is needed to interpret its ongoing relevance","Limited publicly visible substantive content in the provided text — the actual operative provisions and schedules (which would contain the complex formulas) are not reproduced, making full analysis difficult","Intersection of insurance law, actuarial principles, and workplace safety regulation increases interpretive complexity"],"plain_english_summary":"This NSW statutory instrument sets how the Retro‑Paid Loss Premium Method adjusts workers’ compensation premiums for the 2014–15 policy year. It governs retrospective premium adjustments for qualifying large employers based on actual claims experience, affecting those employers, insurers and icare. It matters because it links insurance cost to workplace safety, creating incentives for better risk management and potential financial exposure for poor outcomes."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This Order creates a distinct premium‑calculation regime that applies only to retro‑paid loss premium policies for the 2014–15 policy window (cl 4(1)–(3)). It supplements and, where it provides otherwise, displaces the relevant General Order (cl 4(4)). Key scope changes include prescribed adjustment dates and formulas (cl 6; Schedule 1), group‑level aggregation rules (Schedule 2), and specified adjustment factors (Schedules 3–4), all of which alter how premiums are measured and allocated compared with the baseline General Order (cl 3(1))."},"complexity_factors":["Multiple staged recalculations at fixed adjustment dates (cl 3(2), cl 6) increasing administrative events.","Detailed mathematical formulas for deposit and adjusted premiums contained in Schedules 1–2 (Schedule 1, cl 1; Schedule 2, cls 2–3).","Caps and floors on adjusted premiums (Pmin/Pmax) and a statutory minimum premium ($175) that constrain outcomes (Schedule 1, cl 2; cl 7).","Group aggregation rules and allocation between group members introduce allocation complexity (Schedule 2, cls 1–4).","Experience and claims adjustment factors calculated by formula (Schedule 3) and a discrete table of claims factors tied to elected large claim limits (Schedule 4).","Interaction with a separate ‘relevant General Order’ (cl 3(1)–(2), cl 4(4)) requires cross‑referencing other instruments to implement fully."],"plain_english_summary":"This Order prescribes how premiums are calculated for employers who choose the retro‑paid loss premium option under section 168A. It sets an initial deposit and requires recalculation at 15, 24, 36 and 48 months using prescribed formulas, group rules, a claims/experience adjustment system and a $175 minimum.\n\nIt applies to policies taking effect from 4 pm 30 June 2014 up to 4 pm 30 June 2015 (cl 4). Employers pay the adjusted amounts; insurers apply the formulas, shifting timing and cash‑flow of premium payments."},"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"This Order appears tightly scoped to its original purpose: implementing the retro-paid loss premium method for a specific financial year (2014–2015). It does not expand beyond the technical mechanics of premium calculation for this specific optional alternative method. The cross-references to the 'relevant General Order' and the Workers Compensation Regulation 2010 are necessary contextual hooks rather than scope creep."},"complexity_factors":["Extensive mathematical formulas with multiple variables (RD, T, C, V, P, Pmin, Pmax, S, Q, D, M, A, etc.) embedded as images that cannot be read as text","Cross-references to two other instruments: the Insurance Premiums Order 2014–2015 and the Workers Compensation Regulation 2010","Conditional logic based on timing (four different adjustment dates with different calculation methods)","Different calculation methods for individual employers versus group members (Schedules 1 and 2)","Nested definitions where terms like 'cost of claims' are defined by reference to yet another regulation (Division 4 of Part 18 of Workers Compensation Regulation 2010)","Dual-track calculations depending on whether the employer elected a $350,000 or $500,000 large claim limit","Temporal conditions affecting which formula applies (before/after third adjustment date, first/second vs third/fourth adjustment dates)","Fallback provisions for policy continuation if no replacement order is made by the expiry date"],"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 four times over the next four years based on their actual claims costs. This means their final premium reflects their real workplace safety record.\n\n**Who it affects:**\n- **Large employers** who opt into this alternative premium calculation method under section 168A of the Workers Compensation Act 1987 (NSW)\n- Employers who are members of **corporate groups** (special rules apply for calculating group premiums)\n- Policies issued or renewed between 30 June 2014 and 30 June 2015\n\n**Key mechanics:**\n- **Four adjustment dates:** Premiums are recalculated at 15 months, 24 months, 36 months, and 48 months after the policy starts\n- **Minimum premium:** No employer pays less than $175\n- **Claims adjustment factors:** Multipliers that decrease over time (from roughly 3.0 down to 1.7) depending on whether the employer chose a $350,000 or $500,000 large claim limit\n- **Floor and ceiling:** Adjusted premiums cannot go below a minimum or above a maximum calculated amount\n\n**Why it matters:**\nThis gives large employers with good safety records the chance to pay lower premiums over time, since their actual claims experience directly affects what they pay. However, it also creates financial uncertainty—if claims costs are higher than expected, premiums will increase at each adjustment date."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015","history":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015/history","analysis":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015/analysis","conflicts":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015/conflicts","importantCases":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015/important-cases","documents":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2014-2015/documents"}}