Frequently Asked Questions

Is the State public sector self insured?

How many members does SISA have?

How is SISA funded?

What is the benefit of self insurance? Why do companies do it?

What does the term ‘exempt employer’ mean?

How long has SISA been operating?

Who can join SISA?

What proportion of the State’s employment is covered by self insurance?

Are self insurers given a free hand to manage OH&S and injury management as they see fit?

What is the relationship between self insurers and unions like?

What is the current scaling factor for financial guarantees?

Where can I find more detail about self insurance?

How does the performance of self insurers compare with the rest of the workers compensation scheme?

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Answers

Is the State public sector self insured?

Yes. The legislation specifies that the State public sector is self insured. The public sector accounts for about half of SISA’s membership, or 18% of the State remuneration base.

How many members does SISA have?

This fluctuates as new companies join and change through mergers, de-mergers, acquisitions and so on. At any given time, SISA has 70-75 full members and about 60 associate members.

How is SISA funded?

SISA is wholly funded by member subscriptions and sponsorships. It receives no subsidies or other support from any regulator or Government body.

What is the benefit of self insurance? Why do companies do it?

The primary objective of self insurance for most businesses is to improve the cost-effectiveness of their OH&S and workers compensation arrangements. For example:

• Not being a part of the broader workers compensation insurance pool releases the employer from the cross-subsidies that inevitably occur in insurance pools. If an employer is a superior safety performer, its workers compensation costs will be lower. While self insurers regard best practice OH&S to be far more than a simple business proposition, the self insured employer does get the immediate benefit of those lower costs. If it was still in the insurance pool, that superior performance would be offset by the poorer performance of other employers, and there would be little or no change in the levy the employer would have to pay. This is especially the case since the bonus-penalty scheme ceased to operate on 1 July 2010.
• Being a self insurer allows a business to manage its own claims at the workplace. It is generally accepted that workplace-based injury management delivers better claim outcomes in terms of returns to work and rehabilitation. This benefits both the injured employee and the employer.

What does the term ‘exempt employer’ mean?

‘Exempt employer’ was the term used in the Workers Rehabilitation & Compensation Act 1986 to describe self insurance. In 2008, the Act was amended to delete all references to 'exempt employer' and adopt ‘self insured employer’ as the preferred term, as it more accurately describes the concept. 'Exempt’ and ‘self insured’ have in the past been used interchangeably when discussing self insurance in South Australia, but 'exempt' is no longer the correct statutory term.

How long has SISA been operating?

SISA was formally incorporated on 3rd August 1984 as the Employer Managed Workers Compensation Association, although it eventually adopted the name SISA. On 1st November 2005 the association was officially re-named as SISA.

Who can join SISA?

Full membership is limited to organisations that are self insured. Associate membership is available to other organisations that are applicants or potential applicants for self insurance or providers of services to self insurers. Please refer to the ‘Joining SISA’ pages on this website for more detail.

What proportion of the State’s employment is covered by self insurance?

Information provided by WorkCover indicates that 36% of South Australia’s remuneration is paid by self insured organisations.

Are self insurers given a free hand to manage OH&S and injury management as they see fit?

Not as much as is sometimes thought. Self insurers are subject to scrutiny from a number of sources. WorkCover has control over the granting and renewal of self insurance, and has an elaborate financial oversight system and audit teams to monitor OH&S and injury management performance. Self insurers are also scrutinised by SafeWork SA in the same way as all other employers. They are also scrutinised by State and Federal regulators under specific industry standards and measures, environmental laws and so on. It is arguable that self insurers are some of the most scrutinised employers in South Australia.

What is the relationship between self insurers and unions like?

At a policy level, it is SISA’s understanding that most unions oppose self insurance. However, at the workplace level, self insurers generally report having a sound and constructive relationship with the unions and associations that represent their employees.

What is the current scaling factor for financial guarantees?

The current scaling factor is 200%.

Where can I find more detail about self insurance?

Consult the Code of Conduct for Self Insured Employers on the WorkCover website or contact SISA on 8232 0100 or sisa@sisa.net.au.

How does the performance of self insurers compare with the rest of the workers compensation scheme?

This is difficult to state with precision but data provided by WorkCover and self insurers indicates that self insurers on average: 

• Have lower numbers of lost time claims
• Experience lower average lost time claim duration
• Carry a proportionally lower claims liability
• Generate better workplace health and safety outcomes