{"id":"nsw:sl-2015-0327","name":"Insurance Premiums Order (Retro-Paid Loss Premium Method) 2015–2016","slug":"insurance-premiums-order-retro-paid-loss-premium-method-2015-2016","collection":"regulation","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"327 of 2015","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":177609,"registerId":"nsw-nsw:sl-2015-0327-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) 2015–2016](/view/html/inforce/current/sl-2015-0327).","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 2015 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of claims has the same meaning as in Division 4 of Part 18 of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037).\n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 2015–2016](/view/html/inforce/current/sl-2015-0281), or\n> > \n> > > (b) if no such order has been made, the [Insurance Premiums Order 2014–2015](/view/html/inforce/current/sl-2014-0311).","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 2015 and before 4 pm on 30 June 2016.\n> \n> > (3) If, before 4 pm on 30 June 2016, 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, 4, 7 and 9) 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> An employer is classified as a large employer under this Order if:\n> \n> > (a) the basic tariff premium of the employer for an insurance policy at the time at which the insurer demands a premium for the policy:\n> > \n> > > (i) exceeds $500,000 (where the period of insurance to which the premium relates is 12 months), or\n> > \n> > > (ii) would exceed $500,000 (where the period of insurance to which the premium relates is not 12 months) if that premium was calculated using a period of insurance of 12 months, or\n> \n> > (b) the employer is a member of a group of which at least one member satisfies paragraph (a).","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%3D0327)%20AND%20(Year%3D2015)%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%3D0327)%20AND%20(Year%3D2015)%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> BTP 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":"Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation","content":"#### 9 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation\n\n9 Calculation of costs of individual claims and provisional payments of compensation: clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of Regulation\n\n> For the purposes of clauses 154 (2) (d) (ii) (C) and 155 (2) (d) (ii) (C) of the [Workers Compensation Regulation 2010](/view/html/repealed/current/sl-2011-0037), the amount specified is $1,999.30.","sortOrder":8},{"sectionNumber":"10","sectionType":"section","heading":"Schedules form part of Order","content":"#### 10 Schedules form part of Order\n\n10 Schedules form part of Order\n\n> Schedules 1–4 form part of this Order.","sortOrder":9},{"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":10},{"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":13},{"sectionNumber":"Schedule 3","sectionType":"schedule","heading":"Size adjustment factor","content":"# Schedule 3 Size adjustment factor\n\nSchedule 3 Size adjustment factor\n\n(Schedule 1, clause 2 and Schedule 2, clause 4)","sortOrder":18},{"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":22}],"analysis":{"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This Order narrows and specifies the premium‑calculation regime for employers electing the optional retro‑paid method: it applies only to those employers and to policies effective 4 pm 30 June 2015–4 pm 30 June 2016 (s4(1)–(2)), introduces a defined deposit/adjusted premium mechanism (s6) with minimums (s7), and sets separate group rules and adjustment factors (Schedules 1–4). It also excludes specialised insurers (s4(5)). In short, it departs from the general tariff approach by imposing a bespoke, time‑limited alternative method."},"complexity_factors":["Multiple timing points for recalculation (15, 24, 36, 48 months) and different formulae per stage (s3(2), s6, Schedule 1)","Separate treatment for individual employers and group members with aggregation and allocation rules (Schedule 2, cl 1–4)","Interlocking numeric factors: size adjustment (Schedule 3), claims adjustment (Schedule 4 table), large‑claim limit choices affecting factors","Minimum and maximum premium constraints and a flat minimum premium ($175) that override formula outputs (s7; Schedule 1 cl 1)","Required deposit formula referencing basic tariff premium and adjustment of deposit before/after third adjustment date (s8)","Dependence on definitions and amounts from the Workers Compensation Regulation and the relevant General Order (s3(1), s4(4), s9)","Numerical constants and thresholds embedded in the Order (e.g. $175 minimum, $1,999.30 amount, $350k/$500k limits) requiring precise implementation","Operational burdens on insurers to compile claim costs, apply factors, and administer group allocations (Schedules 1–4)","Temporal scope and transitional fallback if a new order is not made (s4(2)–(3)), adding administrative contingency"],"plain_english_summary":"This Order prescribes a specific way to price \"retro‑paid loss premium\" workers’ compensation policies: insurers take a deposit at policy start and then recalculate premiums at 15, 24, 36 and 48 months using prescribed formulas, caps and floors. It applies only to employers using the optional s168A method for policies effective between 4 pm 30 June 2015 and 4 pm 30 June 2016. Employers (including grouped employers) pay the deposit and any adjusted premiums; insurers must apply the computations and factors."},"summary":{"complexity_score":5,"scope_assessment":{"changed":false,"description":"Based on the available information, there is no indication the scope changed from its original intent. The order appears to have been made and applied as a standard annual renewal of the retro-paid loss premium framework for the 2015–2016 period, consistent with prior years' equivalent orders."},"complexity_factors":["Specialist actuarial and insurance premium calculation concepts (retrospective premium adjustment) that require industry knowledge to fully understand","Operates within a broader legislative framework (NSW workers' compensation legislation) that must be understood in context","Technical financial mechanics — the retro-paid loss method involves formulas, minimum/maximum premium limits, and loss conversion factors not visible in this excerpt","Limited actual legislative text is available in the provided document — mostly metadata and navigation, making full analysis difficult","Applies only to a specific subset of employers (large employers opting into the scheme), creating complexity in determining who is affected","Time-limited operation (2015–2016 year) adds complexity when determining ongoing relevance versus historical application"],"plain_english_summary":"This order establishes how the Retro‑Paid Loss Premium Method worked for the 2015–2016 workers’ compensation year in NSW: large employers who opt in have their final premium adjusted after the policy period to reflect actual claims costs. It sets the legal framework insurers and WorkCover NSW must follow for that year. It has been in force since 26 June 2015, applies only to 2015–16, and is now mainly of historical interest."},"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"},"issue_detection":{"absurdities":[],"contradictions":[]},"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"This Order maintains its original narrow scope as a specific premium calculation methodology for the 2015–2016 policy year. It applies only to retro-paid loss premium policies under section 168A and does not expand beyond this technical administrative purpose. The Order is one in a series of annual instruments (evidenced by the year-specific naming) and operates within the established framework of the Workers Compensation Act and Regulation without broadening its application."},"complexity_factors":["Multiple mathematical formulas with variables defined across different schedules (at least 8 distinct formulas shown as image references)","Cross-references to the 'relevant General Order' (Insurance Premiums Order 2015–2016 or 2014–2015) and the Workers Compensation Regulation 2010","Nested conditional logic: different calculation methods apply depending on whether the employer is in a group, which adjustment date applies, and what large claim limit was elected","Four different adjustment dates triggering different calculations and different floor/ceiling caps","Dual-track system: separate Schedules 1 and 2 for individual vs group employers, with Schedule 2 requiring aggregation of group data","Multiple defined variables (at least 15: P, C, V, PD, Pmax, Pmin, V4, BTP, S, Q, D, M, A, plus group variants PEd, PGd, PGmin, PGmax, BTPE, BTPG, SG, PE, PG, CG, VG, CE)","Conditional minimums and maximums that change based on timing (first/second vs third/fourth adjustment dates)","Integration with external statutory provisions (section 168A, 172A of the Act; clauses 154, 155, 165 of the Regulation)"],"plain_english_summary":"This Order sets out a special way for large employers in New South Wales to calculate their workers compensation insurance premiums. Instead of paying a fixed premium upfront, employers can use the \"retro-paid loss\" method, where they pay an initial deposit and then have their premium adjusted over four years based on their actual claims costs.\n\n**Who it affects:**\n- Large employers (those with basic tariff premiums over $500,000 per year)\n- Employers who are part of a corporate group where at least one member is large\n- These employers must have chosen this optional alternative method under section 168A of the Workers Compensation Act\n\n**How it works:**\n- **Deposit premium:** An initial amount paid when the policy starts\n- **Four adjustment dates:** Premiums are recalculated at 15 months, 24 months, 36 months, and 48 months after the policy starts\n- **Final premium:** Based on actual claims costs, with minimum and maximum caps to protect both employer and insurer\n\n**Key features:**\n- **Minimum premium:** No premium can be less than $175\n- **Safety net:** Premiums can't drop below 60% or rise above 150% of the original deposit (with some variations at later adjustment dates)\n- **Group treatment:** Companies in the same group have their premiums calculated together\n- **Size adjustment:** Larger employers get different calculations than smaller ones\n- **Claims limits:** Employers can choose a $350,000 or $500,000 limit on individual large claims, which affects their adjustment factor\n\n**Why it matters:**\nThis gives large employers more control over their insurance costs. If they run a safe workplace with few claims, they pay less over time. If they have many claims, they pay more. It incentivises workplace safety while giving insurers protection through caps on how much premiums can vary."}},"importantCases":[],"_links":{"self":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016","history":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016/history","analysis":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016/analysis","conflicts":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016/conflicts","importantCases":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016/important-cases","documents":"/api/acts/insurance-premiums-order-retro-paid-loss-premium-method-2015-2016/documents"}}