Frequently asked questions - Insurance

This section contains some of the most commonly asked questions about Comcover. They are divided into the following categories:

  • General Questions
  • GST
  • Insurance and Premiums
  • Exemptions from participation in Comcover
  • Proof of Insurance
  • Comcover and Comcare

 

General Questions

What is Comcover?

Comcover is the Australian Government's self-managed insurance fund. It is administered by the Department of Finance for the benefit of Fund Members. Comcover commenced operation on 1 July 1998.

Comcover's purpose is to work in partnership with Fund Members to promote a risk management culture and deliver an effective insurance program across the Australian Government.

A managed fund is a form of self-insurance that operates by collecting premiums from participating Fund Members and accumulating reserves in order to meet future losses from those reserves.

Why is a managed fund necessary?

A managed fund is a responsible, modern and cost-effective way for the Australian Government to manage its insurable risks. It consolidates resources through the systematic identification, quantification, reporting, and management of risk across Australian Government departments and entities.

The Fund replaces the Australian Government's former policy of non-insurance, which offered little incentive for public sector organisations to manage their insurable risks effectively.

Who belongs to Comcover?

The Comcover Fund covers entities subject to the Public Governance, Performance and Accountability  Act 2013 that are classified to the General Government Sector.

All non-corporate and corporate Commonwealth entities within the General Government Sector are required to belong to the Fund, unless they are specifically exempted. Exemption can only be granted by the Minister for Finance.

Entities classified to the Public Financial Corporation sector and Public Non-Financial Corporation sector are excluded from the Fund.

What does the Fund cover?

Comcover provides broad cover for all classes of general insurance normally available in the commercial insurance market.

Cover is available for:

  • damaged, lost or destroyed property;
  • losses resulting directly from such property damage or loss. This can include losses associated with business interruption, relocations or the need to engage technical or other expertise; and
  • legal liabilities of an insurable nature. These include the costs of judgments if a court finds an entity liable for a claim or for out-of-court settlements related to a claim and associated legal costs.

As with commercial insurance policies, the Fund provides for replacement or reinstatement of damaged or lost property but does not cover losses arising from guarantees or indemnities given by the Australian Government.

The Fund does not cover workers' compensation, which remains the responsibility of the Australian Government's Comcare program.

Unless otherwise agreed, liabilities arising from events that occurred before the introduction of Comcover will be met under the previous non-insurance arrangements.

Comcover does not offer cover nor issue premium invoices to private organisations or individuals.

What are the benefits of Comcover to the Australian Government as a whole?

In addition to benefits for individual entities, Comcover provides improved risk management benefits to the Australian Government as a whole by:

  • helping to protect the Budget and individual programs against unexpected insurable losses;
  • achieving transparency and greater accountability in managing the Australian Government's insurable risks;
  • reducing the cost of insurable losses to the Budget over time;
  • reducing total costs to the Australian Government through pooling premiums and spreading risks;
  • enabling the Australian Government to centrally accumulate risk knowledge and expertise;
  • enabling better coordination and uniformity of approach to the litigation of claims against the Commonwealth; and
  • providing a vehicle for accessing catastrophe insurance protection from the private sector.

What are the benefits of Comcover for Fund Member entities?

Comcover offers substantial benefits, including:

  • fewer exclusions and conditions than found in traditional insurance contracts;
  • a short, simple but comprehensive policy document;
  • more stable premiums for Fund Members;
  • fair and equitable claims settlements;
  • efficient and user-friendly claims management;
  • efficient claims payments;
  • maintenance of accurate claims records for each Fund Member;
  • regular and prompt reports on claims results and trends;
  • the full financial benefits of bulk buying;
  • ongoing advice and assistance on ways to improve risk management practices; and
  • convenient, one-stop shop service.

How do Fund Members find out more about general terms and conditions of cover?

The Comcover Statement of Cover is available on this website.

How are entities kept up to date on Comcover?

From time-to-time Comcover also issues Information Bulletins to keep Fund Members updated on current issues.

What do I do if I have a dispute with Comcover or any of Comcover's Service Providers?

Comcover's Statement of Cover lists the procedure for dispute resolution with regard to claims and premiums. A summary is provided below.

  1. Dispute resolution – Claims
  1. Any dispute arising between a Fund Member and Comcover, or between Fund Members, concerning any matter relating to the application of this Statement of Cover, including as to:
  1. the scope of cover provided; or
  2. the settlement or management of a claim against the Fund, must be settled between the parties concerned according to the following procedure.
  3. You must notify Comcover of the nature and circumstances of the dispute and your expectations for resolution of the dispute. Comcover will investigate as necessary and respond within one calendar month.
  4.  If the dispute cannot then be resolved the matter must be referred to the Secretary of the Department of Finance and the Chief Executive Officer of the member organisation or their nominees.
  5. If the dispute cannot then be resolved the matter must be referred to the relevant Ministers.

  If you would like to provide us with feedback or discuss any issues please contact your Relationship Manager or call Comcover on 1800 651 540.

GST

Are Comcover Fund Members subject to GST?

Insurance services provided in Australia are subject to GST.

Expatriate travel insurance is GST exempt.

How do Fund Members work out their entitlement to input tax credits on insurance premiums?

Comcover recommends that entities seek professional advice when calculating their entitlement to claim input tax credits.

What is the impact of GST on Comcover insurance settlements?

GST is taken into account when calculating the amount to be paid in settlement of claims.

It is important that entities notify Comcover of the extent of their entitlement to claim input tax credits before cover begins, so that claims can be processed efficiently.

Insurance and Premiums

Who is the underwriter for Comcover?

The Australian Government, through Comcover, is the underwriter of the Comcover Fund. As Comcover is not a separate legal entity but a part of the Commonwealth, a liability of Comcover is a liability of the Australian Government Budget.

How will Comcover keep the cost of insurance down?

The history of public and private sector funds similar to Comcover shows that significant savings are achieved over time. This will be possible with Comcover because the Australian Government is pooling large groups of risks. There are less infrastructure costs (commissions, capital, overheads etc), less need for the Australian Government as a whole to buy external insurance, and benefits from economies of scale in dealing with providers on a whole-of-government basis. Comcover provides more stable premiums that, over time, are lower than the long-term cost of commercial insurance premiums.

Can Fund Members influence the amount of their premiums?

Yes, Fund Members premiums reflect claims histories as well as their individual risk exposures. This is consistent with sound commercial insurance practice and underwriting principles. Fund Members are charged higher premiums if they have poor claims histories.

Do premiums reflect the individual circumstances of each Fund Member or are they community rated to the aggregate risk profile of the whole pool?

Primarily, premiums reflect the circumstances and claims history of each Fund Member. Fund Member premiums are set, where possible, on the past experience of the Fund Member and an assessment of the current level of risk. However, a key benefit of a fund is that there is some balance made to allow consistency in premiums and spread short-term costs, which helps to alleviate the pressure experienced with exceptional, one-off large losses.

Why does Comcover accumulate reserves?

Comcover follows conventional insurance practice and quarantines all losses for a particular year against the premiums received for that year. Therefore, each year Comcover needs to set aside an amount (reserves) to meet anticipated liabilities arising from claims for that year (please note that claims, particularly in the liability classes of insurance, may take a number of years to settle).

The level of reserves required to meet outstanding liabilities remains a matter for periodic actuarial estimation until claims are actually settled. Comcover will use any accumulated surplus reserves to reduce future Fund Member premiums.

If a Fund Member provides a number of third party indemnities, in particular, to contractors performing work for the Fund Member, does Comcover take over these indemnities?

For the most part, the answer is no - Comcover only provides cover for normally insurable risks. Indemnities are exposures voluntarily entered into by an entity and are not usually insurable in the commercial insurance market because, among other things, they may remove incentives to exercise a duty of care.

However, any indemnities in place as alternatives to commercial insurance arrangements may be considered by Comcover on a case-by-case basis. Please refer to the Indemnity and Insurance Clauses in Commonwealth Contracts for instructions and requirements.

Exemptions from participation in Comcover

Can entities seek exemption from participating in Comcover?

Corporate and non-corporate Commonwealth entities subject to the PGPA Act that are classified to  the General Government Sector are required to participate in the Fund.

Exemption can only be granted by the Minister for Finance.

Proof of Insurance

How do Fund Members provide external parties with proof of insurance?

Comcover can provide Fund Member insurance contacts with generic Certificates of Currency which act as proof of insurance under the Comcover Fund.

If you have a specific requirement please contact your entities primary insurance contact in the first instance or alternatively contact your Relationship Manager or call us on 1800 651 540.

Comcover and Comcare

What is the relationship between Comcover and Comcare?

Comcover has no role in Comcare's operation as the Australian Government's workers' compensation insurer and Comcare covers workers' compensation insurance.

Comcover's Relationship Management Team

Comcover's Relationship Managers are responsible for delivering a range of services to Comcover's Fund Members. They are your single point of contact for all insurance, claims, risk management, Comcover Portal, training and event related enquiries.

How do I tell Comcover about a new staff member?

If you have a new staff member who either needs access to the Comcover Portal or to be included on our mailing list for course and event information, please call 1800 651 540.


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