Security to be restored to workplace insurance

"The Government has honoured a key election pledge today with the introduction
of legislation to dismantle the privatisation of workplace insurance," Accident
Insurance Minister Michael Cullen said.

The Accident Insurance [Transitional Provisions] Bill has been referred to a
special select committee for report back by 29 February.

Key provisions are:
* ACC to be restored as the single accident insurer from 1 July, next year.
* The self-employed, new employers and the uninsured to be covered by ACC
from 1 April.
* Private insurers? ability to write new workplace accident insurance
contracts to be repealed at 1 April, next year.
* All private accident insurance contracts to be cancelled from 1 July.
* The Accredited Employers? Programme to be reinstated from 1 April.

It is a transitional measure only. More comprehensive legislation will be
introduced into the House at the earliest opportunity next year to deliver the
rest of the Government?s ACC agenda.

"We are committed to restoring the focus on community responsibility which
characterised the original principles of the ACC scheme and to reintroducing
lump sum payments. We also plan initiatives to promote a stronger emphasis on
rehabilitation and accident prevention," Dr Cullen said.

"These reforms and the elimination of National's ill-conceived market regime are
fundamental to the Government?s social policy framework.

"When ACC was formed in 1974, New Zealanders gave away the right to sue in
exchange for guaranteed entitlement on a 24-hour no fault basis. Successive
National governments have chipped away at that contract. This Government is
determined to protect it.

"That is the basic philosophy underlying our repudiation of the competitive
model.

"But we also have strong practical reasons for our decision. ACC has achieved
significant efficiency improvements in recent years and the Government is
confident that the average levy rate from 1 July, next year will be no higher
than average premiums are now.

"I would expect that for many firms, they will be lower. Certainly they should
be more stable and predictable over time as overseas experience of the private
workplace insurance market is that premium rates are highly volatile.

That is not good for business planning and it is not good for the economy,? Dr
Cullen said.

Contact: Patricia Herbert, 471-9412