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COMCOVER: responsible risk management for the Commonwealth Government.
Minister for Finance and Administration
THE HON JOHN FAHEY, MP
Responsible Risk Management for the Commonwealth Government
I am pleased to announce that a new Commonwealth insurable risk managed fund, called ‘Comcover’, wi ll be commencing operations as from 1 July 1998.
A risk managed fund is a form of self insurance that collects contributions from participating members, accumulates reserves, and meets future losses from those reserves.
Comcover, which has been modelled on the best managed funds in Australia and overseas, will replace the Commonwealth Government’s existing out-dated policy of non-insurance.
The policy of non-insurance, which has been in place since 1909, offers little incentive for public sector organisations to manage their risks effectively. The introduction of the new fund will, for the first time, require the systematic identification, quantification, reporting and management of risk across Commonwealth departments and agencies.
Risk management via a managed fund is the preferred choice of most of the State Governments and a number of major corporations both within Australia and overseas. Experience with similar funds in both the public and private sectors has seen significant reductions in overall costs through better and more visible management of risks.
About 150 Commonwealth agencies will be covered by the fund with membership of individual agencies phased in over the next six months.
Members will be able to purchase cover for all their normal insurable risks with the exception of workers’ compensation, which will remain the responsibility of Comcare.
The fund will be managed by a small unit within my Department of Finance and Administration, whilst all of the operational tasks, including risk assessment, risk management advice, underwriting, claims management, actuarial services and reinsurance, have been or will be outsourced to the private sector.
The International Risk Management Group (IRMG), international experts in the establishment and management of managed funds have provided practical advice on the establishment of Comcover. AON Risk Services Australia Ltd has been contracted to undertake a risk assessment of all members of Comcover.
I have also established a Comcover Advisory Board to provide the Government with independent advice on the extent to which the fund is meeting its objectives.
The Board is comprised of both public and private sector members, three senior private sector representatives with insurance industry and insurance law expertise and two senior public servants including a representative of a public sector client organisation.
The members are, Mr Phillip Shirriff, Managing Director, ING Australia, Mr Murray Campbell, Deputy Chairman, Australian Unity Friendly Society, Mr Anthony Fox, Partner, Phillips Fox Lawyers, Mr Len Early, Deputy Secretary, Department of Finance and Administration (Chair) and Mr Peter Grant, Deputy Secretary, Department of Employment, Education, Training & Youth Affairs.
The introduction of Comcover marks a new responsible and innovative approach to the issue of risk management in the Commonwealth.
Canberra 30 June 1998
Media Contact: Anna Schulze 02 6277 7400