Tuesday, 4 May 2021

A report to the Berejiklian Government revealing such gross mismanagement of a public sector agency that it was probably thought a blessing that it was formally ordered published on a Friday

Failure of the icare Board to govern, lack of expertise, conflicts of interest, unethical behaviour, financial mismanagement, failure to meet standards, inappropriate behaviour, lack of accountability and grossly excessive executive remuneration – just a few of the problematic issues revealed in the 2020 annual review of this state compulsory workers compensation scheme, managed by icare since 2015 under ‘reforms’ established by the NSW Baird Coalition Government.

Sadly, the 2019 Independent reviewer report on the Nominal Insurer of the NSW workers compensation scheme: For the State Insurance Regulatory Authority (NSW) foreshadowed what was to come in 2020, by failing in its report to discourage the icare board and management from continuing the organisation’s wayward course.

NSW Legislative CouncilStanding Committee on Law and Justice2020 review of the Workers Compensation Scheme, April 2021, excerpt:


Finding 1

That the multi-billion losses incurred recently by the Nominal Insurer and Treasury Managed Fund have been caused, in large part, by a collapse in return to work rates arising from icare’s decision to introduce a new claims management model.

Finding 2

That return to work rates have fallen further in schemes managed by icare than in schemes managed by specialist and self-insurers.

Finding 3

That icare has failed to address the fall in return to work rates in the Nominal Insurer and the Treasury Managed Fund with either the urgency or thoroughness they deserved given the negative impacts falling return to work rates have on injured workers and the financial sustainability of the scheme.

Finding 4

That the Nominal Insurer and the Treasury Managed Fund will continue to sustain major underwriting losses until icare improves return to work rates.

Finding 5

That implementation of the Work Injury Screening and Early Intervention (WISE) protocols, that deliver early and active intervention for injured workers with musculoskeletal injury that have a risk of delayed return to work, have had a significant positive impact on return to work rates, and despite this evidence being available to icare they have not been adopted in the Nominal Insurer or the Treasury Managed Fund.

Finding 6

That icare has too often failed to reach the standards of behaviour expected of a New South Wales public sector agency.

Finding 7

That icare’s decision to select Guidewire and Capgemini to build the Nominal Insurer Single Platform appears to have been predetermined, and led to project costs rising from $110 million to more than $360 million.

Finding 8

That Mr Vivek Bhatia and Mr Michael Carapiet failed to take appropriate steps to declare, record and manage the conflict of interests arising from Mr Bhatia’s personal relationship with the leaders of Capgemini.

Finding 9

That Mr John Nagle's decision to appear in a video endorsing Guidewire’s software, and to accept their sponsorship of a trip to Las Vegas to appear at their 2018 conference, was inappropriate.

Finding 10

That icare failed to clearly notify bidders that it was considering the appointment of a sole scheme agent to manage Nominal Insurer claims in the 2018 tender and as a consequence, the tender process was not fairly conducted.

Finding 11

That icare’s implementation of a claims management system that has a single scheme agent to manage all nominal insurer claims by using a sole scheme agent has failed.

Finding 12

That icare appears to have applied undue pressure on EML to engage The Bridge International using a Project Service Order mechanism.

Finding 13

That icare’s decision to select the Perceptive Group to develop a Net Promoter Score transgressed all reasonable conflict of interest principles.

Finding 14

That icare’s decision to award Mr Rob Craig unlimited authority to enter into contracts to build the Nominal Insurer Single Platform was inappropriate and contrary to an express policy determined by the Board.

Finding 15

That icare’s systemic failure to comply with key requirements of the Government Information (Public Access Act (2009) is longstanding, systematic and remains unacceptable.

Finding 16

That icare’s policy of permitting senior executives to engage in secondary employment is inappropriate, especially given the extraordinary levels of the salaries paid to icare executives to perform their work for icare.

Finding 17

That the icare Board failed to appropriately sanction the former Chief Executive Officer and Managing Director after his inadequate disclosure of a serious conflict of interest involving a close family member.

Finding 18

That icare failed to provide Mr Chris McCann with a safe workplace and inappropriately required him to enter into a non-disclosure agreement after he raised serious concerns with icare's governance.

Finding 19

That the icare Board comprehensively failed to properly govern icare.

Finding 20

That icare's Board lacked members with expertise in personal injury management or workers compensation.

Finding 21

That mechanisms between the icare Board and Treasurer have failed to work in making icare accountable for its conduct.

Finding 22

That the level of executive remuneration at icare is grossly excessive, and is likely to have contributed to poor cultural practices at icare, and is out of keeping with community expectations.

Meet the icare Board at https://www.icare.nsw.gov.au/about-us/our-people/our-board.

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