Workers Compensation Claims and Policy Services, Remuneration, Schedule 3 (v2), Scheme Agent Deed...

8/14/2019 Workers Compensation Claims and Policy Services, Remuneration, Schedule 3 (v2), Scheme Agent Deed (between Nominal Insurer and Allianz Australia Work

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WorkersComPensationClaimsandPolicYServices

7 February 008

Schedule (vzlNominal nsurer

AndAtlianzAustraliaWorkers'Compensation NSW)Limited


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Schedule - Remuneration

lnterpretationln this Schedule apitalisedermshave he meanings et out n Schedule 4(Glossary)unless he contextotherwise equires.This Schedulencludeshe Annexure o Schedule .Note:The Schedule glossary temshavebeenmoved o Schedule 4.

Schedule3-Remuneration Page2Version: 2.A -7lO2nOO8 Allianz Australia Wo*ers' Canpensation (NSW) Linited

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A. RemunerationPreamble

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Sctredule 3 - RemunerationVersion: 2.O-1A06f20(}9

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TheSchemeAgentmayberemuneratedforde|iveryofservicesandabhievement ioutcomes rompoolsof capital n amountsasJeterminedby the Nominal nsurerand n accordancewith thisSchedule.The Remuneration eePools re :a. The ServiceFee Pool SFP),b. The Performance eePool PFP);c. The Incentive ee Pool lFP);d. The Innovation ee Pool IVFP);The SchemeAgentwill be paid an am-ountor policy enewaladministration ervicesas detailed n Section2'TheSchemeAgentmaybepaidanamountasanAddit iona l |ncent ivefee (nfD on "Jhiuu"mentof outcomesas per Section7'8'Remuneration vailable o the schemeAgentwill be determinedby afee distributionormula or SFP,PFPand IFP'Remuneralion romthe SFPwill be paid o the scheme Agentaccording o the nu*b"|. of Policies,he premium or CalendarYear nand the proportionoi s"h"r" liability f the Portfoliomanaged, romiime to time,by the schemeAgentduring he Periodof SchemeServices. Section1).The sFP available or eachYearof the Periodof Schemeserviceswill'forthepurposesofthe_paymentofServiceFeesduringCa|endarYeartn l ,Uediv idedinto four 'equalpar t -swi thoneofthosepar tsbe ingattocateOor eachQuarterof the CalendarYear'ThePFPforCalendarYear2006,2007and2008isaf ixeddo| |aramountandwill OeJistriUuted asedon the Portfoliomanagedby the-SchemeAgentr romt imetot ime,dur ingthe in i t ia | threeyearPer iodofscheme Services. pFp will not be indexedannually. section6).Remunerationromthe PFPwill be paid o the scheme AgentwheretheSchemeAgentmeetsPerformanceFeeTargetsdeterminedbydefined Metricsfor: RTW;and FoM achieved n reducing the liabilityofthe Portfoliomanagedby the SchemeAgent'

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The fFP for CalendarYear 2006,2OO7 nd 2008 s a fixeddollaramountand will be distributedbasedon the Portfoliomanagedby theschemeAgent rom ime o time,during he nitialthree earperiodofSchemeServices.FPwill not be indexedannually.Remunerationromthe IFP will be paid to the scheme Agentwherethescheme Agent meets ncentiveFeeTargetsdeterminedby definedMetrics or RTW and FOM.Remunerationor AIF willalsobe paid,where he SchemeAgent ncafenderYear (n ) s entitledo be paid ooo/o f the schemeAgententitlement o IFP determinedby Metrics or RTW or FoM subject othe provisions f Section7.8.The IVFPwill be available or each Year of the periodof schemeservices at the absolutediscretionof the Nominal nsurer. f a project sagreedunderSub-clause .16of the Deed henpayment rom heIVFPwill be made in accordancewith the agreedVariationNotice.The schemeAgentmay propose nnovationnitiatives s partof theDraftAnnualservicesPlan or considerationy the Nominal nsurer.The Nominal nsurermay request he SchemeAgent o provideabusiness ase o the Nominal nsurer f the proposednitiatives to beconsidered or Approvalby the Nominal nsurer.The cost or expenseinvolved n providinga businesscase to the Nominal nsurerconcbrningany initiativewill be at the sole expenseof the schemeAgent.The Nominal nsurermay also propose he introduction f schemewide nitiatives nd may allocate rom he lVFp at the Nominal nsure/sdiscretionand expense o the SchemeAgent an amount or suchinitiatives.unless agreedotherwise, he Remunerationor any extendedperiod ofSchemeServiceswill be basedon annualamountsof:a. SFP 2008 varied n accordance ithSection1.1.2;b. PFP of $104mvaried n accordance ithSection .1.2.andc. IFP of $43.2mas varied n accordancewith Section7.1-2.

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Schedule 3 - RernunerationVersion: 2.0 - 12/06,[2009

Targetsxvii. The SchemeAgent's remuneration rom PFP and IFP will be measuredagainst he following argets:

a. RTW; andb. FoM.

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Schedule3 - RemunerationVersion: 2.O-1?06,n0o9


xviii. The SchemeFOM arget or he nitial hreeYearPeriodof SchemeServiceswill be determined y the SA basedon an initialactuarialvaluation s at 30 June2005.Performance eeTargetsand ncentiveFeeTargets or the Periodof SchemeServiceswill alsobe set for RTWand FOM relative o the Schemeperformancemeasuredas at 30 June2005.A targetsettingmethodologywill then be set for PerformanceFeeTargetsand IncentiveFeeTargets or the SchemeAgentrelativeto the SchemeAgent'sPortfolio.

xix. The SA will also preparean actuarial aluationof the SchemeAgent'sportfolioas at 31 December2OOS.Wherehe SchemeAgent'sPortfoliovaluationas at 31 December2005 s materially reater hantheschemeAgent'sPortfolio aluation s at 30 June2005, he NominalInsurermay,bu t s not bound o, amend he original chemeagent'sbaseline alculationsn theSchemeAgent's avour.Any amendmentothe originalschemeagent'sbaselinecalculationswill be agreedwiththe SchemeAgent.

xx. The SA when makinganycalculation oncerninga target, ncludingaMetric,a result,or relativity,will do so to an appropriate umberofsignificant iguresas determined y the SA.xxi. performanceFee Targetsand lncentiveFeeTargetswill be set for theSchemeAgent following he actuarial aluationat 30 June 2005andeach Year.The targetswill then apply or the followingCalendarYeal'These targetswill be variedaccording o the provisions f Section5-2.xxii. tn order to receive he full entitlementromthe lFP, the SchemeAgentwill have to achieve lO}o/o f RTWand FOM lncentiveFeeTargetssetfor 31 December2008for the SchemeAgent'sPortfolio'xxiii. A Transition eewill be paid n accordance ithSection10.1.1 o theSchemeAgentupon eaching ransitionMilestones:

( i ) upon thep rov i s i ono fanexecu tedPer fo rmanceduarantee (if any is requiredby the Nominal nsurer)andthe FinancialSecurity referred to in Clause 18 of theDeed o the Nominalnsurec( i i )upon theSchemeServ icesCommencementDate ;and(iii) upon the final Approval of the completionof TransiiionServices.

xxiv. A File Receiptand TransferFeewill be paid to the schemeAgentfromthe SchemeServicesCommencementDateandthroughout he Periodof SchemeServices.

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1 .11 .11


Service Fee PoolDefinition Indexation& ApportionmentThe SFPfor a CalendarYear(n),exclusive f GST [SFP2006]s$205,000,000and thereafter or the Year 2007 [SFP2007]andthe Year 2008 [SFP2008]will be calculated n accordancewithTab le .1 .1 .The SFP for Year 2009 [SFP2009]will be calculatedusingSFP2008 ncreasedor decreased n the ratio of 16% Policies nforce and 84olo pfl Claims n the Scheme as at 30 June 2005compared o the numberof Pol icies n force and open Claims nthe Scheme as at 30 June 2008.The SchemeAgent may, prior o 1 September2008, provide heNominal nsurerwrittennoticesettingout the annual ncrease ntotal remuneration (based on employees' annual GroupCertificates or FY06/07 and FY07l08)of all staff roles that arefully dedicated to the provisionof the Services. lf this reportshows that the overall cumulative average increase inremunerationover that periodexceeds he increase n AWE forthe periodby 60/ohen the Nominal nsurerwill, but is not boundto, take this into account as one of the factors n determining heService Fee Pool for each Year of the extended Period ofSchemeServices.

Table1.1.1(ref:Schedule Table1.1)

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Schedule - RemuneratonVersircn:2.O 12/OO/2OO9 Page 6Allianz Australia Workers' Compensation (NSW) Linited

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Item Formula / DescriptionsFP(2006) = $205,000,000

Service Fee Pool for a Calendar Year 2006, exclusiveof GSTsFP(20O7) = $195,000,0OO AWE (n) where n = 2C07

Service Fee Pool for a Calendar Year 2OO7exdusive of GSTsFP(2008) = $180,0O0,00O AWE (n) x AWE (n-1) where n = 2O08

Service Fee Pool for a Calendar Year 2008,exclusiveof GSTsFP(2009) = SFP $ X AWE (n) wfiere n = 2O09.

ServiceFee Pool for a CalendarYear 2009, exdusive of GSTsFP(2010) = 2009SFPX AWE n)where =20'10

Service Fee Pool for a Calendar Year 201A,exclusiveof GSTsFP(2011) = 2O1O FPX AWE(n)wheren = 2011

Service Fee Pool for a Calendar Year 2011,exclusiveof GSTAWE(n) = [AWEat 30 Septembern)] [AWEat 30 Septembern-1)]


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1 .1 .4


lllustrative able sFP demonstrateshe estimatedamountp ofServiceFee available or distributionusingAWE rate of four percentumper annum or the Periodof SchemeServices'

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Schedule 3 - RemunerationVersion: 2.O-1U06,nOOg

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lllustrativeTableSFP


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1 .21 .2 .1

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Schedule - RemunerationVersion:2.O IUOO/2OO9


Service Fee Sub-PoolsThe ServiceFee Pool or a CalendarYear (n ) [SFP(n)l s dividedinto three sub-poolsbeing: Initial Policy Service Fee sub-pool[SFPol(n)]; nitialPremiumServiceFee sub-pool [SFPrem(n)];and Initial LiabilityUnder ManagementService Fee sub-poolISFLUM(n)].The totalamountavailableor the ServiceFee sub-poolswill be calculatedn accordance ith Table 1 2.1.The ServiceFee Pool or a CalendarYear (n ) [SFP(n)]will alsobe divided into three alternativesub-pools being: the alternativePolicyServiceFee sub-pool ASFPol(n)];he alternativePremiumService Fee sub-pool [ASFPrem(n)]; nd the alternativeLiabilityUnder ManagementService Fee suFpool [ASFLUM(n)].Thetotal amount available or the Service Fee sub-poolswill becalculatedn accordance ith Table1.2.1.Table1.2.1(ref:Schedule Table1.2)

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Item Formula / DesciptionlSFPol(n) = 160/o SFP(n)

The InitialPolicyServiceFee sub-poollSFPrem(n) = 4oo/o SFP(n)

The InitialPremiumService Fee sub-poolISFLUM(n) = 44o/o SFP(n)

The InitialLiabilityUnderManagementServiceFeesub-poolASFPoI(n) = 20Yo SFP(n)

The alternativePolicy Service Fee sub-poolASFPrem(n) = 4OTo SFP(n)

The altemativePremiumServiceFee suFpoolASFLUM(n) = 4oo/o SFP(n)

The allernative Liability Under ManagementService Fee subpool


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1.41 .4 .1

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Schedule 3 - RemunerationVersion: 2.0 - 1210612A09


PremiumService Fee AllocationThe Initial Premium Service Fee sub-pool allocatedScheme Agent in Calendar Year (n): ["lSFPrem(n,a)"];calculatedn accordance ithTable 1.4.1.The AlternativePremium Service Fee sub-pool allocatedSchemeAgent in CalendarYear (n): ["ASFPrem(n,a)"];calculatedn accordance ith Table1.4.1.Table 1.4.1(ref:Schedule Table 1.4)

to thewill beto thewill be

1.4.3 For the purposes f calculatingSFPrem(n,a) nd ASFPrem(n,a):lPOPrem(n,a)and lPOPrem(n)will be calculated at the end ofeach Quarter using the data recorded in the WorkCoverdatabase starting 31 March in Year (n) and ending with acalculation s at 31 Decembern Year n) .

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Item Formula / DescriptionlSFPrem(n,a)(n = 2006,2OO7,2W8,2009,2010,20 11)

= lSFPrem(n) lPOPrem(n,a) lPOPrem(n)The InitialPremiumServiceFee for the SchemeAgent n CalendarYear(n )

ASFPrem(n,a)(n = 20O6,2007,2408,2009,2O1O.2O11)= ASFPrem(n) lPOPrem(n,a) lPOPrem(n)The Altemative Premium Service Fee for the SchemeAgent in CalendarYear(n)

lPOPrem(n,a) = fEarned TPrem(l,n,a) n respectcf all Policies or he SchemeAgent nCalendarYear (n)The sum of Eamed BasicTariffPremiumn respectof all Policies or theScheme Agent's Portfolio for any exposureduringthe CalendarYear (n)

TPrem(l,n,a) = The greaterof T(l,n) x Wages(l,n,a) nd he minimumPremiumnotedunder Schedule7 of the IPOTh" f"r\,VlC Cl-r*'ff* th"SchemeAgent n CalendarYear (n)

T(l,n) The WIC Class Rate for WIC Class "1"as set out in the IPO in force at 1Januaryof each CalendarYear(n).Wages(l,n,a) The Wages for Policieswith W|C Class rate for WIC Class "1" or theScheme Agent in CalendarYear (n), basedon the data recorded n theWorkCoverdaiabase as at the date of calculation.lPOPrem(n) = fEamed TPrem(l,n,a) n respectof all Policies or all scheme agents nCalendarYear (n)

The sum of Eamed Basic Tariff Premium n respectof all Policies or theScheme for any exposure during the CalendarYear (n)


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1 .51 .5 .1

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Schedule 3 - RemttnerationVersion: 2.0 - 1206/2009t r-':i


Table1.5.1(ref:Schedule Table 1-5)

LiabilityUnder ManagementServiceFee AllocationThe lnitial LiabilityUnder ManagementServiceFee sub-poolallocated o the ScfremeAgent ii CatendarYear (n): [ISFLUM(n,a)l,will (subject o sectio-ns '5'3 and 1'5'4)be calculatednproportion o the liabilityof the Scheme relative o the Portfoliomanaged by the Scheme Agent to the end of the previousCaeniar Year(n-ri"nO in acclordanceithTable1'5'1'The Alternative iabilityUnder ManagementServiceFee sub-pool allocated o the'Scheme Rgent in CalendarYear (n):IASFLUM(n,a)l; wiit-1suolecto slctions 1'5'3 and 1'5'4) becalculated n proportion o'ttt" liabilityof the Scheme relative othe PortfoliomanageJ oy tn" Scheme Agent to !h"-"$ of thepreviousCalendar "" t ti-rl and n accordance ithTable1'5'

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Item Formula / Descriqtion= rqr t t lM(n)x I UM(n.a) LUM(n)The InitialLiability uno"' t't"*ffi-nt s"rvice Fee for the scheme Agent inCalendarYear (n).= aqrt t M/n\x I t lM(n.a) LUM(n)The Altemativ" t-i.OilityGG, tutffiument ServiceFee for the SchemeAgent n CalendarYear (n).sLiab(n-2)+ sRP(n-1)The Liabilityunoff tut"n"g"r*n-t f- calendar Year (n) for the scheme'= Liab(n-2,a) RP(n-1,a) r CalendarYear (n) in resPectofthe SchemeAgentThe inflatedtnd oir*rntJlut Oui't"nding liabilityof the Scheme nrespectof Claims n*"uJrJio and including31 December n) ' as at3lDecember n+1) litY f hePgtr?l1?fClaimsmanagedy heschem;;s";i';;.t"-tpea6f ctaimsncurredp oandincluding 1 December n),as at 31 December n+1)'and usingassumptionsthe SA considers appropriate o the whole Scneme

ISFLUM(n,a)(n = 20O6,2OO7,2OO8.2009,2010,2011)ASFLUM(n,a)(n = 2006,2007,2@8,2009,2010,20 11)LUM(n)(n = 2006, OO7,20o,8.2009, 010, 01 )LUM(n,a)(n = 2006,2OO7,2OO8,2009,2010,2011)SLiab(n)(n = 20O4.2005,2006,2007,2008,009)Liab(n,a)(n= 2004,2005,2006,2007,2008,oo9)SRP(n)(n=2O05,20O6.2007,008,2009,2010)

fhe SchemeRisk Premium or Calendar Year n' ' caruurdtwd,*'v'rthe actuarialvaluation as at 31 December (n)

= SRP(n) lPOPrg.(n,") /'|PoPrem(n)ent' calculatedaccording o theactuarialvaluation as at 31 December(n)

RP(n,a)(n=2005.20O6,2OO7,OO8,2OO9,2010)

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1 .5 .3

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Schedule - RemunerationVersion:2.0-12/0/2009


ln determining SFLUM(n,a) nd ASFLUM(n,a) hereClaimsaremoved to or from the Scheme Agent at the Directionof theNominal nsurer n accordance ithSub-clauses .7,8.8 or 8.9ofthe Deed, Liab(n,a)and RP(n,a)will be adjusted o reflectsuch amovementor movementsby addingor subtracting he proportionof Liab(n,a) nd RP(n,a) ttributableo thoseClaims.ln determining SFLUM(n,a) nd ASFLUM(n,a)or CalenderYear2006, where Claims aretransferred rom an OtherSchemeAgentto the Scheme Agent at the Directionof the Nominal.nsurerduringCalendarYear 2006, SFLUMand ASFLUM or CalenderYear 2006 relative to those Claims and the time during whichthose Claims were under management y each schemeagentduring Calendar Year 2006, will be apportionedbetweeneachscheme agent on the basis of each full or part Month as theNominal nsurerdetermines ppropriate, ha t hoseClaimswereundermanagement y each.

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1.6 Total ServiceFee Entitlements1.6.1 The totalServiceFee (SFP)entitlementor the schemeAgent ncalendar Year (n ) will be calculated in accordance withTable1.6.11.6.2 The service Fee paymentsare determinedaccording o theprocess se t ou t in section 1.8. This recognises ha t theinformationneededto calculate he ServiceFee entitlements orcalendarYear (n ) will no t al l be knownat the start of calendarYear n).

Table1.6.1(ref.New)Formula Desciqtion= lSFPol(n,a) tSFPrem(n,a) ISFLUM(n'a)

ItemISFP(n, )(n = 2006,2OO7,2OO8,2009.2010.2011) The InitialServiceFee for the schemeAgent n calendarYear (n)-= ASFPol(n,a) ASFPrem(n,a) ASFLUM(n,a)ASFP(n, )(n = 2006,2007,2W8,2009,2010,20 11) ffiFee for the SchemeAgent n CalendarYear (n).= Max lSFP(n,a) , ASFP(n'a)FP(n.a)(n = 2006,2007,2OO8,2009,2010, 01 )

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1 .8


Payment of Service Fees by Instalments

Useof quarterlvnstalments1 .8 .1

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Sctredule3 - RemunerationVersion: 2.O-1U06,l2Wg

TheQuar te r | y i ns ta lmen tsw i l | bees t ima tedacco rd ing toTab le .8 .1 .As at 1 January 2007 and subsequentYearly periods n thePer iodo fSchemeServ ices the f igure fo rAWErequ i red fo r thecalculation f sFP(n) for the Year 2OO7o Year 2011 inclusivewill no t be have been publishedby the AustralianBureau ofStatistics.The SA will calculateSFP(n) fo r Year 2007 to Year 2O1'linclusiveusing an estimate or the increaseor decrease,as thecircumstances equire' of the AWE for the previousYear' Thisestimatewill be used o determine he four QuarterlypaymentsofServiceFeesto the SchemeAgentof eachYear'Thef igurerequiredfor theca|cu la t ionofSFP(n)wi | |bepubl ishedOeforJtfre ime of the ServiceFee adjustment alculation'SFP(n)will then be re-calculated y the sA using he published igure orthe relevant Year. Tne ad-ditional aymentor clawbackwill beadjusted to account for any overpaymentor underpayment orSieln,a; made in respectof the Quarterlypayments or the Year'

The Service Fee for each calendar Year (n) will be paid inQuarterlYnstalmentsAnadjustmentcalcu|a t ionper formedonequar teraf ter the.endoftha tyearand therew i l |beanadd i t iona |paymento rc |awbacko fpreviousoverpayments t this time'

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Timinqof pavments1.8.7 For Ca|endar Year 2006 and Q1 of Calendar Year 2007,payment of Quarterly instalments to the Scheme Agent willbu"on.." due at the end of the relevantQuarter. Once ServiceFeeshavebecomeduetheyarepayab|eto theSchemeAgent inaccordancewith the termsof the Deed, ncluding lause 38-

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Amountof Aqents'quarterlvnstalments

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For 2006 the amounts of each of the first four quarterlyinstalmentswill be determined y the sA. The finaradjustmentinstalmentwill be determined ccordingo Table1.g.1.For20O7,2008, 009,2010and2011 heamounts feachofthequarterly nstalmentsand the final adjustment nstalmentwill bedetermined ccordingo T'able .8.1.

Table1.8.1(ref: ncludesSchedule Table 1.6)

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Schedule - RemunerationVersion:2.O 1AA612@9--);


For the quarters from Q2 of Calendaryear 2007 to e4 ofCalendarYear 2008, paymentof Quarterly nstalmentso theSchemeAgent will become due on the commencement f therelevantQuarter. Once ServiceFeeshave becomedue they arepayable o the scheme Agent in accordancewith the termsof theDeed, ncludingClause38.The adjustment calculation fo r Calendar year (n ) will beperformedusingdata from the Schemedata repositoryextractedas at 31 Marchof the following alendar ear.The Nominal Insurerwill make a once only Interim paymentequal to 75o/o f the Nominal nsurer'sestimateof the SchemeAgent's Service Fees for the first Quarter of 2006.This paymentwill be made within 30 days of receiptof a Tax Invoiceby theNominal nsurer, uchTax lnvoice o be providedwithin7 daysofthe Nominal nsurernotifying he schemeAgentof the estimateof the first Quarter of 2006 service Fees. This amountwill berecoveredagainst he fourthQuarter'sServiceFeefor 2006.

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Item Formula / DescriptionSFP(n)n = 2006,2007,2008,2009,2010.2011 Calculatedaccordingo Table 1 1 1SFPa(n)n=20O7,268, 009.2010,2011

= SFP(n)x 25%The total quarterlyService Fee instalment or all schemeagents

SFPQ(n, ,q)n = 2006,2007,2OO8.2009,2010,2011q = 1 , 2 , 3 ,

= SFPQ(n)x PSFMS(n,a)The quarterlyService Fee instalment or the SchemeAgent. This iscalculatedby reference o the SchemeAgents' preliminaryService FeeMarketShare.

SFP(n.a) Calculatedaccording o Table 1 6.1


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Formula/ DescriPtion= SFP(n,a)-isrPoii',",1)sFPQ(n,"'2)SFPAdj(n,a)n = 2006. 007.2OO8,

2009, 010, 0'l1 The final ServiceFee adjustment or the SchemeAgent

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2


Policy Administration Fee2.1.1 The Policy AdministrationFee for the Scheme Agent will bedetermined ccordingo Table2.1.1.

Table2.1.1(ref: New)

2 .1 For the purposes f calculating nd he payment f PAF(n,a):(i ) DomesticPolicieswith a minimumPremiumare includedin Npolal l(n,a);(ii) Where Policiesare cancelled n full after he effectivedateof calculationa reduction in the Policy frequencycountwill occur for every Policy cancelled rom inceptiondateand for every Policy recorded n the WorkCoverdatabasewitha policystatusof "null".The assessmentof PAF(n,a) will be performedusing the datarecorded n the WorkCover atabaseat 31 March n Year n+1).The entitlement to Policy Administration Fees, PAF(n,a), willbecome payable once the information equired o completethecalculation s available or all schemeagents. As a guide thispaymentwould generallybe made the same time as the finaladjustment or ServiceFeesfor CalendarYear (n).

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Scfiedule - RemunerationVersion:2.O-1A06f2OOg Page18Allianz Australia Workers' Compensation(NSI/V)LinitedT . , : : ' ! : ll+: I : . .1

Item Formula / DescriptionNallpol(n,a) ls the numberof policiesssued n GalendarYear (n) by SchemeAgent (a).PAF(2006,a) = $6.00x Nallpol(n,a)

The PolicyAdministration ee for the SchemeAgent or CalendarYear 20O6PAF(2OA7,a) = $4.50x Nallpol(n,a)

The PolicyAdministration ee for the SchemeAgent or CalendarYear2@ZPAF(2008,a) = $3.00x Nallpol(n,a)The PolicyAdministration ee for the SchemeAgent orCalendar ear 2OO8


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3

Schedute - Remuneration

Return o WorkMetric3 . lRe tu rn toWorkMe t r i c_Desc r i p t i on&Formu |ae3 . l . l TheRTWMet r i c i s theave ragedayspa idweek l yBene f i tcompensationAVGDURNdI. he AVGDURNdMetric s dividedinto threeduraiionbandsrepresentinghe calendarmonths hathave elapsed from date of Injury recorded n the workcoverdataoase. The RTW Metric is derived in accordance withTab le .1 .1 .

Table3.1.1(ref: ncludesSchedule3 Table 2-4)Formula / Desciqtion= TDO5d NTDOSdThe average otaldaysof incapaci$ or eligible laims for duration and d)= ITOOO wherethe sum is acrosseligible laimsand njurymonths m)

= l l t . t o "wo lwhere thesumisac rosse | ig ib |ec la imsand in ju rymon ths (m)-feach Claim n band(d).

The weights (Wd) for each Claim = A/BThe weights (Wd) will be calculatedas a ratioA'lBwhere:

"A" s the numberof week daysduring he relevant ssessment eriod hat heCtaim alls ntodurationband(d);"8" is the maximumnumberof weekdays n durationband(d);'the relevantassessment eriod" s the 6 or 12 calendarmonthperiodprior oassessment ate (t);andVeek days"meansMonday o Friday nclusive'

Numberof eligibleClaims or durationband(d)

ItemAVGDURNd(d = 26, 52,78\TDO5dNTDO5d

Wd

NdAn eligibleClaim or duralionband (d) s one:

(i )which has greater han5 daysTDO at the AVGDURNd alculation ate;and(ii) For which time has elapsedsince the date of Iniuryand falls intodurationband(d)duringtheassessmentperiod.Thisisequivalenttoc|aimsthatoriginatein certain"injurymonths (m), where thesevary by durationband'

Totel davs offwork for a Claim=TI+S38+S40TDOFor d = 26 this s O o 6 calendarmonlhs;For d = 52 this s 6.01 calendarmonths o 12 ca|endarmonths;andFor d = 78 this s 12.01calendarmonths o 18 calendarmonths;Being that partof TDO for a claim wherethe time elapsedsincedate of lniury is inrft r:lian hand d durino the relevantperiodof the Claimcoveredby the calculation

TDOd(d = 26,52.78)

Days off work for total incapacitypayments= thours off work /.hoursworked per week)x 5 for full ime Workers'= (hours offwork / hours worked per week)x 5 x (hours worked per weeU 37'5h^,,rq wnrkad ner week) for oart time Workers

TI

s0 = Days off work between ncapacitydatesx 75% for section40 payments or rulltime Workers= Days of work between ncapacitydatesx 7'"/o-forsection40 paymentsx (hoursworkeOper week87.5 hoursworked per week) for part time Workers

Sctredule3 - RemunerationVersion: 2.O- 7 IOZI2OOaPage19

AtlianzAustraliaWorkersCmrpensationNS1 ) Linited

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3.23 .2 .1

3.2.2

3.2.3

3.2.4

Schedub3 - RemunerationVersion:2.0- 1A0612009

;i

Scheme RTW Baseline Metrics & CalculationsFor CafendarYea( 2006,2007 and2008the SA will calculate heScheme esultas at 30 June 2005 using he data recorded n theWorkCoverdatabaseas at 31 July 2005 in respectof the period1 July 2AO4b and including30 June 2005 ISAVGDURNd] oreach durationband referredo in Table3.1.1 fDO526, TDO552;and TDO578I or Small Employer,MediumEmployerand LargeEmployer.For CalendarYear 2009,2010and 2011 he SA willcalculate heSchemeresultas at 31 December2007using he data recordedin the WorkCoverdatabaseas at 31 January2008 in respectofthe period1 January2OA7 and including 1 December2007ISAVGDURNd]or each durationband referred o in Table3.1.1[fDO526, TDO552:and TDO578] or Small Employer,MediumEmployerand LargeEmployer-For CalendarYear 2006, 2OO7and 2008 the calculation f theSAVGDURNdas at 30 June 2005using he data recorded n theWorkCoverdatabase as at 31 July 2005 in respectof the period1 July 20O4 to and including 30 June 2005 will provide aBenchmark B] Metric or SmallEmployer,MediumEmployer ndLargeEmployer ivenby Table3.1.1For CalendarYear 2009, 2010 and 2011 the calculation f theSAVGDURNdresult as at 31 December2OO7using the datarecorded in the WorkCoverdatabase as at 31 January 2008 inrespect of the period 1 January 2OO7 o and including 31December 2007 will provide a Benchmark B] Metric for SmallEmployer, Medium Employer and Large Employer given byTabfe .2.1 .

Table 3.2.1(ref: ncludesSchedule Table2.5)


Page 20Allianz Australia Workers' Cornpensation(NS:W)L-nited

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= Days off work between ncapacitydates for seclion 38 payments or full timeWorkers= Days off work between ncapacitydates for section38 paymentsx (hoursworkedper week/37.5hours worked per week) for part time Workers

Item Formula DescriptionSmallEmpioyerSML) An Empioyerwith a BasicTariff Premium of 9i0,000 per annum or iess orWages paymentof $300,000per annum or less.Medium Employer MED) An Employer hat is not a Small Employeror a Large EmployerLarge Employer LGE) An Employer with a Basic TariffPremiumof more than $500,0O0per annum.SAVGDURNd 8, X)(d = 26,52,78X = SML,MED.LGE)

Scheme AVGDURNd (8, X) is calculatedas at 30 June 2005 using the datareeorded n the WorkCoverdatabaseas at 31 July 2005 in respect of theperiod 1 July 2004 to and including30 June 2005 for Claims from Employersin size band X for the Scheme for Calendar Year 2006. 20O7, and 2ffl,Ban d


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Schedule - RemunerationFormula / DescriPtionis""t"rUf"Oasat3lDecember200TusingdatarecordedintheWorkCoverdatabaseas at 31 January2008 n respectof the period1 January.t001Iand including31 December2C[7 for Ciaims from Employer n size band X"tirinf frornine Scheme ot C"l.nd"t Ytut 2009,

2010'

3.2.5

3,2.6

3.2.7

3.33 .3 .1

3.3.2

3.3.3

Schedule 3 - RemunerationVersion: 2.0 - lAO6nOOgr-:: : r,'

Page21Allianz Austratiaworkers' conrpensatkm (NS1tt/) inited

I ; : i1

ln determining hetheran Employer s a SmallEmployer r is aMediumEmpioyeror is a Large Employer he Wage and PolicyPremiumamountsas recorded n the workcover databaseas atthe t imespec i f i ed fo reachmeasu remen t i nTab |e3 .2 .1w i | | beused for the sAVGDURNd calculationas at 31 July 2005 forCalendarYear 2006,2AQ7 nd 2008 and as at 31 January2008fo r CafendarYear2009,2A1Aand2O11'\ | (here thereareC|a imswh ichcon t r ibu te toSAVGDURNdandEmployerdata is no t available or the Policyperiod ending30June ZOOSor Calend t Year 2006, 2OO7and 2008 and 31December2OO7or CalendarYear 2009,2010 and2011the SAwill use the data.the sA considers s the most suitabledataavailable o assesswhether he claims contributeo the SmallEmployer,MediumEmployer r LargeEmployerMetric'The calculationof SAVGDURN26(B),SAVGDURN52(B), ndSAVGDURNTS(B)n respect of the period 'l July 2004 to andincluding 0 June 2005 will be done using he data recorded ntheWorkcove rda tabasea t3 l Ju | y2005and in respec to f thepe r i od l Janua ry2oo7 toand inc |ud ing31December2007 theassessmen tw i l | bedoneus ing theda ta reco rded in theWorkCover atabase t 31 January2008'

SchemeAgentRTWBaselineMetricCalculationsFor CalendarYear 2006, 2007 and2008 he sA will calculatetneScnemeAgent 's resu | tasa t30June2005 in respecto f theper iod lJu | -y2oo4 toand inc |ud ing30June2005nvcounnd(B,a) for each duration band referred to iniable 3.1.1 ';rdOszo, TDO552; and TDO578' for SmallEmployer, edium mployerndLargeEmployer'For Calendar ear2009,2010and 2011 he sA will calculateSchemeAgent (a ) resu l tasa t3 lDecember200T in respecto fthe period January2007 o and including 1 December 007nvdounrud(B,a) for each duration band referred to inTab le3 .1 .1 ' f fDO526 'TDO552;andTDOsTsl fo rSma l lEmployer,MediumEmployer ndLargeEmployer'For CafendarYear 2006, 2007 and 2008 the calculation fAVGDURNd(B,a)esult for the period 1 July 2004 to andincluding 3d June 2005 will provide the scheme AgentBenchniarkB,a]Metric or small Employer,MediumEmployerandLargeEmployeriven yTable3'3'1'

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3.3.4

3.4

3.4.1

3.4.2

3.4.3

3.4.4

Schedule3 - RemunerationVersion: 23-12/06,n@l9

r i-'j

Schedule - RemunerationFor cafendar Year 2009, 2o1o and 2011 the calculationofAVGDURNd(B,a) esult for the period 1 January2007 to andincluding 31 December 2007 wrll provide the Scheme AgentBenchmark[B,a] Metric or Small Employer,MediumEmployerand LargeEmployer ivenby Table3.3.1.

Table3.3.1(ref: ncludesSchedule Table2.6)

scheme Agent RTW BaselineMetric& Relativitycalculations- Unadjusted for GrowthIn this section he use of the term"unadjusted" eans he metricis unadjusted or growth.The scheme Agent's unadjusted baseline Metric wilt then becalculated as the weighted average of the scheme Agent'sresults fo r Small Employer, Medium Employer and LargeEmployer, using the scheme Agent's proportion of eligibleclaims from small Employers,Medium Employersand LargeEmployers. The respective unadjusted proporiionsof eligibleClaimsare PERCSMLd B,a),PERCMEDd1A,a;anO ERCLGEd(B,a).The results are the unadjustedbaselineMetrics or the schemeAgent: AVGDURN2O(B,a), AVGDURN52(B,a), andAVGDURN78(8,a) respectivety.A scheme unadjusted baseline Metric standardised for thescheme Agent will then be calculated or each schemeagent,asthe weighted averageof the scheme baselineMetric reiults forSmall Employer,MediumEmployerand LargeEmployer,usingthe Scheme Agent's proportion of eligible Claims from Smal!Employer, Medium Employer and Large Employer. Thestandardisation s for the Scheme Agent's proportionof claimsfrom small Employer, Medium Employer and'Large Employer.The resultswillbe: SAVGDURN26(B,a),AVGDURNS2(BB)ndSAVGDURNTS(B,) respectively.

AllianzAustratiaWofters'Conrpenr"tionHSlrftPf-ffftl2' : ; t j . j t

Item Formula / DescriptionAVGDURNd 8, a, X)(d = 26,52,78X = SML,MED,LGE)

AVGDURNd 8, X) calculated s at 30 June 20o5using he data recorded nthe WorkCoverdatabaseas at 31 July2005 n respectof the period1 July2004 to and including30 June 2005 for claims from Emptoyei n size band Xfiom the SchemeAgent or Calendar ear 2006,2W7. andZOOSandcalculaledas at 31 December2oo7 usingdata recorded n the workcoverdatabaseas at 31 January 20o8 in respectof the period 1Januaryz@7 roand incfuding31 December2CfJ7or claims from Employer n size band Xarising rom he scheme Agent or carendaryear 2009,201o.and2o11


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3.4_5

3.4.6

3.4.7

3.4.8

Sclredule3 - RemunerationVersion:2.O-1A06f2W9: ; ; ' 1

Table 3.4.1(ref: ncludesSchedule3 T4lu 2'6'1)

: ., 1.

Page23AllianzAustraliaWorkers' Compensation(N$ /) Linited

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Schedule - Remunerationln the remainderof Sections3'4 to 3'7 the use of the term"standard ised"wi l lneusedtodescr ibeth isprocessbywhichthestandardised U"t"fin" tetric is calculated by weighting theproportionsof tfre "o*pon"nt Schemebaselinemetriqs or

small'mediumsand targeeniptoyers n the same proportionsas for theAgent. This makes he metriccomparablewith the Agent result'The calculation by the SA of AVGDURN26(B' a' SML)'AVGDURN26(8, '" , MED), AV-GDURN26(B' a' LGE)AVGDURN52(B, ;: srr,,il-), AV.GDURN52(B',a' , MED)',AVGDURNs2(B, ;;,, LGEi, AVGDURNTs(B', a' sMl)',AVGDURNTS(B'a,-'UEO), and AVGDURNTS(B'a' LGE) inrespectof the penod 1 July 2004 to and including30 June 2005us ing theca ta recorded in theWorkcoverda tabasea t3 lJu |y2005 and in r.usp."t- of the period 1 January 2QO7.to andincludingg1 Oecemb r 2OO7using the data recorded n theWorkCover atabaseas at 31 January2008andwhichgives heMetrics or the SchemeAgent'For eachschemeagentand eachMetrican unadjusted aselinerelativity or the per"iooor scheme services will be calculatedat30 June 2005 fo r C"LnO"t Year 2006 2OO7 nd 2008-and31December2OOTforCa lendarYear200g '2OlOanOJO] ]be ing :RELDURN26(8,ai:nir--ounN 52(B,a) nd RELDURN 8(B'a)'Theunad jus tedbase l i ne re |a t i v i t i esRELDURN26(B 'a ) 'RELDURN2(B,a)"J ner-oUnru!(e'9).tu?t9:"nl^the,elativeperformancef nJ "n"*u Agent'sPortfolO,o hestandardisedScheme baselinJ -putfo*"i"" ISAVGDURNd(B'a)I for thescheme Agent, ior' each of the three duration bands (0-6calendar montfrs; O Ol- -lZ calendar months; and. 12'01-18calendar months), for-the Year of measurement1 July 2OO4 oand including30 June 2005 for CalendarYear 2006' 2OO7and2008 and for the Year of measurement1 January 2AA7 o andincludinggt Oeceml; r 2007 or CalendarYear 2009' 2010 and2011 as givenbYTable3'4'1'

i i:-.{

Formula / DesciPtionFmnlnwpr rrsino lhetemPERCXd(B, )

(d = 26,52,78X = SML,MED,LGE)

The Scheme Agent's baseltne percenlage qrruldata recorded n the workcover oatanaseas al 31 July 2005 nrespect of the period1 July 2o04 to ano inouiln-g-3oJune 20os for claims from Employer n size band Xfrom the Schemeeg.nt foi-C"lendar Year 2W6'2AO7 and 2O08an dcalculatedasat3lDecember200TusingdatarecordedintheWorkCoverdatabaseas at 31January Oos i tJt;ci of tn" rt1o0.1 January 007 o and nduding31December2CfJ7orcr"i'n"-i[t e*proyer-ilsizebandX arisingrom heSchemeno""lt"iC"lendar Year2009, 010'and2011" J - - -= 5Av6palpNd(B SML) x PERCSMLd(B' )+ SAVGDURNd(BMED) x PERCMEDd(B' )+ SAVGDURNd(B GE) x PERCLGEd(B'

)SAVGDURNdB,a)(d = 26 ,52,78)


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Item Formula / DesciptionSchemeunadjustedbaselineaverageduralion band MetricstandardisecJor theSchemeAgent for durationband betweenx and y monthssince date of Injury,forcalendar Year2006, 20o7 and 2008 calculatedas at 30 June 2005 for the period 1July 2004 to and including30 June 2005 using data recordeQn the workcoverdatabaseas at 31 July2005Andcalculatedas at 31 December2007 using data recorded n the WorkCoverdalabaseas at 31 January2008 in respectof the period 1 January 2oo7 o and including31December2O07 or CalendarYear2009, 2O1O, nd 2011.For d= 26 the durationband x to y months in 0 to 6.For d= 52 the durationband x to y months n 6.01 to 12For d= 78 the durationband x to y months n 12.01 o 18

AVGDURNd(B, )(d = 26, 52,78)

=AVGDURNd(B,a, SML) x PERCSMLd(B, )+ AVGDURNd(B, , MED)x PERCMEDd(B, )+ AVGDURNd(B, , LGE)x PERCLGEd(B, )The scheme Agent'sbaselineaverageduralion band betweenx and y monthssincedate of Injury, or calendar Year 2006, 2oo7 and 2008 calculatedas at 30 June 2005for the period 1 JulyZaol to and including30 June 200s using data recorded n theWorkCoverdatabaseas at 31 Juty 20O5andcalculated s at 31 December 007 usingdata recorded n the workcover databaseas at 31 January2008 n respectof the period1 January2007 o and ncluding31December2OO7or CalendarYear 20O9.2A1O.and 2O11For d= 26 the durationband x to y months n 0 to 6For d= 52 the durationband x to y months n 6.01 to 12For d= 78 the durationband x to y months n 12.01 o 18

RELDURNd(B,a)(d = 26,52,781

= AVGDURNd 8, a) / SAVGDURNd 8, a)unadjusted baselinerelativity or the scheme Agent for durationbetweenr anrlycalendarmonthsof lnjury date.For d= 26 the durationband x to y months in 0 to 6For d= 52 the durationbandx to y months n 6-01 o 12For d= 78 the durationband x lo y months n 12.O'to 18

3.4.9

3.4.10

Scfiedule3 - RemunerationVersion: 2-O-1AOU2OA9

For Calendar Year 2006, 2OO7 and 2008 where the SchemeAgent,was not a Licensed nsurer n the period12 monthsbefore30 June 2005 the unadjustedbaselinerelativitywilr be iooo/o oreachduration and.Where the Nominal nsurerdetermines hat the SchemeAgent'sPerforman@ Fee Targets and Incentive Fee Targets will beadjusted in accordancewith Sub-clause 5.5 of the Deed theadjustmentwili be done by recalculating he unadjustedbaselinerelativitiesdescribed n Sections 3.3, 3.4 and 3.6 such that therelativitiesso described epresent he portfolio that the schemeAgent is allocated.

page24Allianz Australia Workers' Cornpensatim (NSW) Linited


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3.5

3 .5 .1

3.5.2

3.5.3

3.5.4

3.5.5

J . C . O

Schedule3 - RemunerationVersion: 2.O-1A06nOOg

Schedule - RemunerationSchemeAgentRTWBase| ineMetr ic&Re|at iv i tyGa|cu|at ions- Adjusted for Growthln thissection he useof the term adjusted"means he metric sadjusted or growth'Scheme Agent (a ) growth adjusted baseline Metric will becalculatedas the weightedaverageol SchemeAgent (a) resultsfor Small emgoyei,"trledium Eirployer a1d^fa.rse Employer'usingscher" ng";i t"i-proportionof-etigible laims from smallEmployers,Medium i"pfoy"tt and Large Employersand theAgents'actualpropottion.oi claimsoriginating..rom each injurymonth (m) . tne respectiveproportionsof eligibleC-laims rePERCSMLdB,a),pEiicrtleod (B,a)andPERCLGEd B'a)'Theresu| tsarethegrowthadjustedbase| ineMetr icsforSchemeng"ni irl, cAVGDdRN26(8,)' GAVGDURNS2(B')' andclvcbunNTS(e, a) resPectivelY'ASchemegrow thad jus tedbase | i neMe t r i cs tanda rd i sed fo rschemeAgent a) wiit nen ue calculatedor eachschemeagent(a), as the weight"J "u"t"ge of the Scheme baseline Metricresults for Smafi'-Employe'r,Medium Employer "ld LargeEmployer, singSchemeAgent (a) proportion f eligibleClaimsfrom Smalr empnvei' Medium Lmployer an-d!3roe Employerand the scheme xg;"t'. actual proportionof claims originatingfrom each injury m6ntn (m). The standardisation s for SchemeAgent (a) proportionof Claims from Small Employer' MediumEmployer ano uar!'e L*prov"'. and their claim distributionbyinjury month. r"ne resutts wiil be : GSAVGDURN26(B,a),GSAVGDU f'fSz(e,aj and GSAVGDURN78(B'a) respectively'The calculation y the SA of GAVGDURN26(B'a' S!t-L]'CnVCOUnN26(ti',MED)' AVG-DURN26(B'"' LgFlcnvcounr.rsz(e,' srt'rr-j,AVGDURN52(B''MED)'cnvcounNs2iB:", r-cei,GAVGDURNT8(B''sML)'-GAVGDURNTS(B:", rraecij' nd GAVGDURNTS(B' ' LGE) nrespectof the p"iioJ 1 Juty2004to and including30 June 2005usingthedatarecordedintheWorkCoverdatabaseat3lJu|y2005and in respectof the period1 January2007to and.including

gt OecemOr 2OOlusing he data recorded n theWorkCoverdatabaseas at 31 January2008 andwhich gives heMetrics or SchemeAgent(a)'For each scheme agent (a) and each Metric a growth adiustedil"il; Jativitv Ji tn.i i'eriodof schemeServices ill becalculated s at'30 June2005using he d_ataecordedn theWorkCoveroataoaseasat3lJu|y2o-osforCa|endarYear20o6'2007and2008 ; 3i-oecemUei 007using hedata recordedin theWorkCover'J"i"U"t"as at 31 JanuaryZOOSiglCalendarYear 2009, ZdrO-""C 2011 being: GR.ELDURN 6(B'a)'GRELDURN2(B,a) ndGRELDURN8(B'a)'

Page25AllianzAustraliaWorkers Cornpensation(NSW) L-nited

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3.5.7

Schedule3- RemunerationVersion: 2.O- 1U05f2OOg

Schedule - Remunerationlle_sqowthadjusted asetineelativities RELDURN 6(B,a),GRELDURN 2(B,a)and GRELDURN 8(B,a) epresentherelative erformancef the portfolioof schemeAgent a), o thestandardisedcheme aseline erformance[sAVGDURNd(B,a)]for schemeAgent a), or eachof the threeduration ands 0-6calendarmonths;6.01 -12 calendarmonths;and 12.01_1gcalendarmonths),or the Yearof measurement July 2oo4 oand ncluding 0 June2005 or calendar ear 2006,20ol and2008and for the Yearof measurement Janu ry 2oor to andincluding 1 December oo7 or calendar earzoog.2010and201 asgiven yTabte .5.1.

Allianz ustralia orkers'anpensation,**rr",H?ff

Table3.5.1(ref:similar o Schedule Table2.6.1\Formula / Description

PERCXd(B, )(d = 26,52,78X = SML,MED,LGE)ADJ SAVGDURNd(8 , a, X)(d = 26,52,78(X = SML, MED,LGE)

= f. I TDOSd(rn,S) NTDOS(m,a) NTDOS(m,S)] / INTDOSd(m,a)where he surn s across njurymonths m) for relevant laimsscheme (s) baselineaveragedurationbandMetricstandardisedor schemeAgent(a) for durationbandd and for a singleemployer ize band,adjusted or actualclaimcomposition.The standardisations for the agents'actualcomposition f claimsby injurymonth.Thisstandardisations achievedby weighting he baseline chemeexperienceby theagentweights n each njurymonth hathas exposure n the relevantd'uration and.ADJ SAVGDURNd(8, a)

(d = 26, 52,78)=ADJSAVGDURNd(B, , SML)x pERCSMLd(B,a)+ ADJ SAVGDURNd(8,a, MED)x pERCMEDd(B,a)+ ADJ SAVGDURNd(B, , LGE)x pERCLGEd(B,a)scheme-baseline veragedurationbandMetricstandardisedor schemeAgent(a)fordurationbandbetweenx and y monthssincedate of lnjury, or calendaryear2006,2w7 and 2008 calculatedas at 30 June 20os for the period 1 July 2004 to andincluding3o June2005usingdata recordedn the workcover databaseas at 31 July200san dcalculaled as at 31 December2007 usingdata recorded n the workcover databaseas at 31 January2008 n respectof the period1 Januaryz@z to and induding31December2OO7or Calendaryear 2009,2O1O, nd 2011For d= 26 the durationbandx to y months n 0 to 6For d= 52 the durationbandx to y months n 6.01 o 12For d= 78 the durationbandx to y rnonths n 12.01 o 1gThe standardisations for both he agentscomposition f claimsby injurymonthandfor the agents proportionof small, medium and large employerctaims.AVGDURNd(B, )

(d = 26,52,78)As per Table 3.4.1

GRELDURNd(B,a)(d = 26, 52,78)

= AVGDURNd 8, a) /ADJ SAVGDURNd 8, a)Growth adjustedbaseline relativity or scheme Agent (a) for durationbetweenx and ycalendarmonths of lnjury dateFor d= 26 the durationbandx to y months n 0 to 6For d= 52 the duratlonband x to y months in 6.01 to 12For d= 78 the durationband x to y months n 12.01 o 1g


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28/70

3.63 .6 .1

3.6.2

3.6.3

3.6.4

3.6.5

3.6.6

a a ' 7\ ) . u . ,

Schedule - RemunerationVersion:2.0- 12J061200l9

Schedule - RemunerationRTW Interim and Year End Metric and RelativityAssessments - Unadjustedand Adjusted for GrowthHalfYearly 30 June)and at the end of each CalendarYear (31December)of the Period of Scheme Services a Metric will becalculatedor the SchemeAgent,calculated t time t, basedonthe data recorded n the WorkCoverdatabase at 31 July (n) forHalf Year calculations nd 31 January (n+1) for end of Yearcalculations.The SchemeAgent'sUnadjustedMetric s the weightedaverageof the Scheme Agent's results for Small Employer,MediumEmployer and Large Employer, using the Scheme Agent'sproportion f SchemeeligibleClaimsas described n Table3.6.1fromSmallEmployers,MediumEmployers nd LargeEmployers.These resultswill be the Metrics or the SchemeAgent at eachpoint in time t: AVGDURN26(a,t),AVGDURN52(a,t),andAVGDURNTS(a,I)nd will be based on the data recorded n theWorkCover database 1 month after the effective date of thecalculation.At each assessrnent ate a Schemeunadjusted aselineMetricstandardisedor the SchemeAgent will then be calculated oi -each scheme agent, as the weightedaverage of the SchemeunadjustedbaselineMetricresults or Small Employer,MediumEmployer and Large Employer using the Scheme Agent'sproportionof eligibleClaims from Small Employers,MediumErnployersand Large Employers or the periodof assessmentassetout n -able3.6.1.At each assessmentdate an unadjusted relativity will then becalculated for the Scheme Agent's portfolio being:RELDURN26(a,t),ELDURNS2(a,t)ndRELDURNTB(a,t).At each assessmentdate a Scheme growth adjusted baselineMetricstandardised or the SchemeAgent will then be calculatedfor each scheme agent, as the weightedaverageof the Schemegrowth adjusted baseline Metric results for Small Employer,Medium Employer and Large Employer using the. SchemeAgent's proportionof eligible Claims from Small Employers,Medium Employers and Large Employers for the period ofassessment s set out n Table3.6.1-At each assessmentdate a growth adjusted eiativitywill then becalculated for the Scheme Agent's portfolio being:GRELDURN26(a,t), RELDURN52(a,t)nd GRELDURNTS(a,t).

Page 28Allianz Australia Workers' Cornpensation (NS1/V) inited

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Formiula DesciPtionTheSchemeAgent,spo.troriop"'*nt'gecontributionfromEmployersinsizebandX,calculatedas at time r u"t"J tlit'" datl recorded n theWork9""*^9:t?:1:at 3'l July(n) for HalfYearcalculations nO31 January n+1) or endof Yearcalculations

PERCXd a,t)(d = 26,52,78n = 2006,2007,2008,2009,2010,2011X = SML,MED.LGE) =AVGDURNd(a,ML )x PERCSMLd(a')

+ AVGDURNd(a, ED )x PERCMEDd(a')+ AVGDURNd(a, GE) x PERCLGEd(a' )

AVGDURNda,t)(d= 26,52,78n = 2006.20O7,2008.2009,010,2 0 1 1 ) ffiveragedurationbandbetweenxandymonthsof|njurydate.calculatedsat timei oaseO i th" duturecordedL tf" W?'!.C.o:::t^1li.t'T:^::31 July(n) or HalfYear calculations nd 3l January n+1) or end of Yearcalculations'Ford= 26 the durationbandx to y months n 0 to 6Ford= 52thedurationbandx to y months n 6'O1 o 12Ford= 78 the durationbandx to y months n 12'01 to 18=SAVGDURNd(B,ML )x PERCSMLd(a')+ SAVGDURNd(B, ED)x PERCMEDd(a')+ SAVGDURNd(B' GE) x PERCLGEd(a' )

= AVGDURNd a,t) SAVGDURNd a't)RELDURNd a,t)(d = 26,52,78t=2006,2007.2O08,2009,2010,2011mid-point nd endn = 2006.2007,2008.2009, 010,201 )

@me Agent's portfolio or durationband betweenx and ymonthsf njuryate' alculatedsat time-tbasedon.thg:!-1"Tt111.i111?^-r',,^.Workcoverdatabaseat gl-.irv (n) for Harfyear calculations nd 31 January n+1) orend of year calculations normatiseowith respecl to the SchemeAgenfs Portfolioexposure o Claimstrorn'dr""fi Employers,MediumEmptoyersand LargeEmployers)'For d= 26 the durationband x to y months in 0 to 6For d= 52 the durationband x to y months n 6'01 to 12

= apl5Av6DURNd(B' a, SML)x PERCSMLd(a' )+ ADJ SAVGDURNd(B' , MED)x PERCMEDd(a' )+ ADJ SAVGDURNd(B' , LGE)x PERCLGEd(a' )

ADJSAVGDURNd(a,t)(d= 26 ,52.78n = 2006,2007,2008,2009,2010,a v t t t

@finemetricforaveragedurationuTd.F.Y.'nxmonths;;; fi;;ih. of njurya"'"t"''0"'oisedorsS:T" f s-:Tf) ::f:i:"" X"-3Y::'based on the data recordei in the workcover databaseat 31 Juiy (n) for Haif Year*[ri"iion. and-31January (n+1)for end of Year calcr.rlations.For d= 26 the durationband x to y months n 0 to 6For d= 52 the durationband x to y months n 6'01 to 12For d= 78 the durat'onband x to y months n 12-01 o 18The standardisations for the agents' compositionof claimsby injurymonth and for the;;"d;6;rtion ots*.lt,tedium "nd latgeet= AVGDURNd a,t) / ADJ SAVGDURNd a't)

Schedule3 - RemunerationTable3.6.1(ref: ncludes nd "tt"n@

January n+1) or end of Year calculationsFor d= 26 the durationband x to y months in 0 to 6For d= 52 thedurationbandx to y months n 6'01 to 12For d= 78 the durationbandx to y months n 12o1 to 18

ff igedurat ionbandbetweenxmonthsandymonthsofInjurydate,standardised o, inu SiJremeAgent's Portfolioas at time t basedon the datarecorded n the workcou"i o"t"o"te at 31 uly (n) for HatfYear calculationsand 31

SAVGDURNd a,t)(d = 26,52,78n = 20O6,2007,2008.2009, 010,201 )

Schedule3 - RemunerationVersion:2.O-1?JC62W9f: : ' j : : . :F, : ' : ' ;" \

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3.7

3 .7 .1

3.7.2

3.7.3

Schedule 3 - RemunerationVersion: 2.O-1U06,BO09

: :, 1


Use of RTW Relativities n Performanceand lncentive FeeCalculationsThe comparison f the unadjustedelativities ELDURNd(a,) tothe PerformanceFee Targets at time (t) will determine he halfyear Performance Fee entitlements. These Performance FeeTargets will be calculated from the unadjusted BaselineRelativities ELDURNd(a, ) for eachof d = 26,52 and 78.At the end of the year two sets of PerformanceFee calculationswill be performed. The first of these used the unadjustedbaselines and results. The second of these uses the growthadjusted baselinesand results-(i) The comparison of the unadjusted relativitiesRELDURNd(a, ) to the PerformanceFee Targets at time(t) will determine the first of these Performance Feecalculation esults. In this case the PerformanceFeeTargets will be calculated rom the unadjustedBaselineRelativitiesRELDURNd(a, ) for each of d = 26, 52 and78.(ii) The comparison of the growth adjusted relativitiesGRELDURNd(a, ) to the Perfonnance Fee Targets attime (t) will determine he second of these PerformanceFee calculation esults. ln this case the PerformanceFeeTargets will be calculated from the growth adjustedBaselineRelativitiesGRELDURNd(a, ) for each of d =

26,52 and 78.(iii) The year end PerformanceFee entitlementswill be thegreaterof the fee entitlements alculatedusing he first orsecond approach.At the end of the year two sets of IncentiveFee calculationswillbe performed. The first of these used the unadjustedbaselinesand results. The second of these uses the growth adjustedbaselinesand results.(i) The comparison of the unadjusted relativitiesRELDURNd(a, ) to the IncentiveFee Targets at time (t)will determine the first of these Performance Fee

. Page 3OAllianz Australia Workers' Conrpensatirn (N$/V) Linited

tj t : i ., .:::i: ' ! : 1

Item Formula DesciptionGrowth ad.iusted elativity or Scheme Agent (a) Portfolio or duration band betweenxand y months of Injury date, calculatedas at time t based on the data recorded n theWorkCoverdatabaseat 31 July(n) for HalfYearcalculations nd 31 January n+'l forend of Year calculations standardisedwith respect o Scheme Agenl (a) Portfolioexposure to Claims fromSmallEmployers,MediumEmployersand Large Employersand for the agents composilionof claims by injury month)For d= 26 the durationband x to y months n 0 to 6For d= 52 the durationbandx to y months n 6.01 o 12For d= 78 the durationband x to y months n 12.01 o 't8


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( i i )

The RTW result assessmentcalculationswill be performedasfollows:

calculation esults. ln this case the IncentiveFee Targetswill be calculated from the unadjusted -Baselineii"r"tiuiti"" RELDURNd(a,B) for each of d = 26' 52 and78 .The comparison of the growthadjusted relativitie.sGRELDURNd(a,l to tne Inc6ntive ee Targetsat-time t)*iri-0"t.*ine the determine the second of thesePerformance Fee calculationresults' ln this case thelncentive f"u fargeit-*itt U" calculated rom the growthadiusted Baseline RelativitiesGRELDURNd(a'B) fo reach fd=26,52and78 'The year end IncentiveFee and AdditionalncentiveFee.nt,tflt"nts will be the greater of the fee entitlements""[rJ"i"o using he firstor second

approach'

For PerformanceFeecalculations: sing he approachsetou t in section6.5,andFor incentive ee and additionalncentive ee calculations:;;i"; i;" approachset out n section7'5'

/ ; ; ; \\ i l r ,

3.7.4

Schedule 3 - RemunerationVersion: 2.O 1Z06f2oo,9

( i )

( i i )

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4.24 .2 .1

4.2.2

4.2.3

Schedule - Rernuneration

Table4.2.1(Ref:Schedule Table2'9)

FOM(Liab) BaselineMetric& RelativityCalculationsForCa|endarYear2006,2oo7,and2008a| iab i l i ty re |a t iv i tywi l |be calculated or tne ScnemeAgent' for Claims Incuned to andincluding31 December200a lRelUaUla)l' For CalendarYear2009, 2010,ano zoir, a liability elativitywill be.calculatedorthe Scheme ngeni, for Claimi Incurred to and including31OecemU"rZOOOtnfl l iab(a)l 'Theba-sel inerelativeperformanceof the Scheme ng""i;'porttotio [RELLiab (a)] t9-!n-e totalscheme performanie or the liabilitycomponentof FoM(n) willbe used to set Or"'tetly and Hatf Yearly Performance FeeTargets or each Metricused'WheretheNominai tnsurerdeterminesthat theSchemeAgent 'sPer fo rmanceFeeTarge tsand |ncen t i veFeeTarge ts -w i | l beadjusted inaccordance"wi thSub-c|ause5.5of theDeedthethebasel inere |at iv i t ieswi l lbereca|cu|a tedsuchthat there la t iv i t iessodescr ibeorepresen t tn "Por t fo | io tha t theSchemeAgent i smanaging.RELLiab a) s calculatedn accordancewithTable4'2'1'

Formula / DesciPtionFor CalendarYear2006,2007,and 2008 = Liab(2O04,a)SLiab(2004'a)For CalendarYear 2O09,2O1O' nd 2011 = Liab(2o06,a) Sliab(2006'a)fficeoftheSchemeAgent'sPortfoliotoihetotalSchemeperformancei ortfolio'as at 30 June2005' nrespectof Claims ncurred o and including31 December2004'This estimationuses assumptions he SA cpnsidersappropriate o the experienceofthe SchemeAgent's Portfolio' -Thenetoutstanding|.abilityoftheSchemeAgent'sPortfolio,asat3lDecember2o0T'of in respecl of claims r'ncrlriJ to and induding 31 December2006 usingtheassumptions. he SA consiler-sappiopriate o tne SctremeAgent'sportfotio- --iffi"i3f.1.i::,ll=.f';'"#i;;;i6:lgi""rg1s,:.1?^"f11?i,.'*;Yjingthell'JJn..'o'i,J;1il:ffiilfii,n" "rp"6"nowi1 eappropriateo hat r hewhole;L?'il':;'d;,';;;#;i ;cr"ih. r"*i""d toandncrudins1December006,usingtheassumptionthatfuturec|aimsexperiencewil|beappropriatetothatofthe'wholeScheme.

ItemRELLiab a)

Liab(200a,a)

Liab(2006.a)

SLiab(20O4,a)

SLiab(2006,a)

Sctredule - RemunerationVersion:2I-1A06[2009.: 4,.:- i

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4.34 .3 .1

4.3.2

4.3.3

Schedule3 - RemunerationFOM (Liab) Results AssessmentAt each Half Year (30 June) and at the end of each CalendarYear (n) (31 December) of the Period of Scheme Services aresult will be calculated for the Scheme Agent in respect ofFoM(Liab).The resultcalculated.

For CalendarYear2006, 2007,and2008being[Liab(200a,t,)] pluslPay 200a,t,a)ls;(i ) The estimated iability s at 30 June and 31 December fthe Scheme Agent's Portfolioof Claims Incurred up toand including 1 December 004 (usingassumptionsheSA considersappropriateo that Portfolio); dded o(ii) The total payments or Benefitsand entitlementsminusRecovery receipts) made for the Scheme Agent'sPortfoliobetween30 June2005and the assessment atet; adjusted or the effect of the unwindingof the discountrate to the assessmentdate.This resultwill be the Metricfo r the SchemeAgentat eachpointof time :

For CalendarYear2009,2O1O, nd2011being[Liab(2006,t,a)]lus[Pay(2006,a)].;(iii) The estimated iability s at 30 Juneand 31 December f

the Scheme Agent's Portfolioof Claims Incurred up toand including31 December 006 (usingassumptionsheSA considersappropriateo that Portfolio); dded o(iv) The total payments for Benefitsand entitlements minusRecovery receipts) made for the Scheme Agent'sPortfolio between 31 December 2OO7 and theassessment. date t; adjusted for the effect of theunwinding of the discount rate to the assessmentdate.This result will be the Metric for the Scheme Agent ateach pointof time :A relativity for Calendar Year 2000, 2007, and 2008[Liab(2004,t,a)+ Pay(2004,t,a)] [SLiab(200a,t,a)] nd fo rCalendar Year 2009, 2010, and 2011 [Liab(2006,1,a)Pay(2006,t,a)l [Sliab(2006,t,a)l will then be calculated or thescheme Agent's Portfotio.The comparisonof these retativitiesotargets at time (t) will determine the contribution of thiscomponentof the FOM measure o the entiflemento paymentasprovidedby Table4.3.1.Table 4.3.1(Ref:Schedule3 Table2.10)

Item Formula Desciption

Schedule3 - Remuneration\tursion: 2.O- 12/O6f20o9

i ):r;;l

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Schedule3 - Remuneration

4.3.4 TheFoM(Liab)resu|tassessmentswil |beca|cu|atedasfol lows.(i) For PerfsrmanceFeecalculations: sing he approachsetou t n Section6-6,and( i i )For incen t i ve feeandadd i t iona l incen t i ve feeca |cu la t ions :using he approach et out n Section7'6'

Sctredute - RernunerationVersion:2.0 12/06/2009Page 35

AllianzAustraliaWorkers Co'npensation (NSW) Linited

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Theestimatedoutstandingliability"t",,",,*"ntd"t"(t)(30Jun^e-and3,|December)o|theSchemegent's t#Jri"liClaims tncuned""g:99:s 31Decembero04il;H;;1ili1"""i." Jun-e-a1d1 December) fthescheme sent'" o#;lio Jir"i*t rn"ul9-9-t?*lg'i:*.,t'

December006ill:ff:="Jfri;nJtnJ'ii consioersppropriateo nat ortfotio)'s Portfolio' f Claims ncuned toandn rudns oecemi;'ilil ;'i 30.r:i:: 99?153:*1f:i""*:i.". lll " "::Jffi:tr;: H:#ileis appropriateo heScheme-his s hen djustedor heunwindingof tn" Olrcou e{-s-PgJtfotio' fClaims Incurred oandncrudingroece,nH';"006'";"i tl ?:::q:i:9tl*-',:'^::"*i,5"1"ffi i.'Jt:::Jffi:tr# $:;:ii",i "oitiil" to n"s't'u,ne.hiss hen diustedorheunwindinsr nuoi"*,n-t'i# iJtJln li D*tb"t 2mentdate (t) on the SchemeAgentsPortfoliofClaims*"""ii" "";;;di"s 31D-ecember3ry,:9":'*:ort",:heffectofH#:ffi';i1:'ii.l",jiil#f,"il"Jn J"6oip"vmunt"not"utati"n"Ju!

ber 2OO7 nd assessmentdate (t) on the SchemeAsent'sPortfrioof b#Jrn;L;Jt*l*:::::'-9*:o:T::*l"i"theeff ectof heffiil.T;Siil: ils;1;;;i;;eil;;;ar;;i eayment;da'"urja_t'enat_et)For CalendarYear 2006,2007' and 2008 = [Liab(2004,t'a) p3y12g0a't'a)][SLiab(2oOa,t,a)lFor Calendar ea r2009,2010,and 20 1 = [Liab(2006,t,a) PaY(2006,t'a)]

RELLiab a,t)

ffie of theSchemeAgent'sportforio f claims o the

'* i tllf :i:1


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4.44 .4 .1

4.4.2

4,4.3

4.4.4

4.4.5

Schedule - RemunerationFOM(lC)BaselineMetric& RelativityCalculationsFor CalendarYear2006,2007,and 2008 or the SchemeAgent,an Incunedcost relativitywill be calculated or the 2003 accidentYear RELIC(a)]. ELIC(a)will be used o set euartertyand HalfYearlyPerformanceFeeTargets.For Calendar Year 2006, 2A07, and 2008 RELfC(a) will becalculatedn accordance ithTable4.4.1.Table4.4.1(Ref:Schedule Table2.11)

t Refer o UDN009

Schedule3 - RemunerationVersion: 2.O-12rc6n0o8

For he purposes f calculatingoM(lc) the claim Limitwillbeapplied.ForCalendar ear2006,2007,and2008 Where he SchemeAgent,wasnota Licensednsurer or the accident ear 2003 hebasefinencunedCost elativity ELIC(a) il lbeset at 1OO%For CalendarYear2009,2010,and2011 he basetinencurredCost refativityRELIC(a)will be set at 10Oo/oor the SchemeAgent.

page 36Allianz Australia Workers' Compensation (NSl /) Linited

a ,; ]Ti,'T

Item Formula / DescriptionRELIC(a) = lC(B,a) SIC(B,a)

The baselinerelativeperformanceof the Scheme Agent'sPortfolio o the total Schemeperformance or the lncuned Cost componenl of FOM(n)lC(B,a) The IncurredCost n respectof Claims nanrredn CalendarYear2003 for the SchemeAgent'sPortfolio, stimated s:i) the net Outstandingiability or accidentYear 2003accordingo lhe acluarialvaluationas at 30 June 2005;added oii ) the net payments o 30 June 20O5 rom he 2003 accident ear, adiusted or theeffectof the unwinding f the discounl ate o 30 June 2005.1This estimation ses he claims experience nd assumptionshe sA considersappropriateo the SchemeAgent'sPor$olioof Claims.src(B) =IlC(B,a) for the SchemeThe lncurredCost n respectof Claims ncurred n CalendarYear 20O3 or the SchemeSIC(B,a) =SlC(8)X lPOPrem(2O03,a)iPOPrem(2003)fhe benchmark ncuned Cost for the SchemeAgent

lPOPrem(2003.a) =rEarned rPrem(|,2003,a) n respectof all Policies o, tnr s"t.r* Rgent n calendarYear 2003The sumof EamedBasicTariffPremiums or al l policiesfor the scheme Agent'sPortfolio or any exposureduring CalendarYear 2003

lPOPrem(20O3) = fEarned TPrem(1,2003,a)n respectof al l Policies or al l schemeagents n CalendarYear2003The sum of Eamed Basic Tariff Premium or all policiesfor the Scheme for anyexposureduringCalendarYear 2003


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4.4.6

4.54 .51

4 .5 .2

4 .5 .3

4.5.4

4.5.5

Schedule3 - RemuneratonVersircn:2.O-1U0F/2W9

Table4.5.1(Ref:Schedule Table2'12)

Schedule - RemunerationWheretheNomina| |nsurerdeterminesthat theSchemeAgent,sperformance Fee T;rg"i; and rncentive Fee Targets wiil beadjusted in accordanc"ewitn Sub-clause 5'5 of the Deed theadjustment il l be i"n" uv ,"calculating he baseline elativitiesdescribedn this ru"irn iuch that thJrelativities so described;p*;;i tne portrotio hat the SchemeAgent s allocated'

FOM lC)Results AssessmentAt each Half Year (30 June) and-at.the end of each CalendarYear (n ) (S t Oece;lGr) of

'the Period of Scheme Servicesaresultwill be catcutateOor the SchemeAgent in respectof FOMiiCi i"i"ti"eto heSchemegent's ortfolio'For CalendarYear 2006, 2OO7and 2008 the resultcalculated sthe estimatedvatue as at 30 June

and 31 Decemberof thescheme Agent,s

-Foruorio of claims lncurred during eachCalendarYear (n), fiom n=?00! to- 2OO7; dded to paymentsmade on the Scfreme ngeni's Po-rtfolio f Claims Incurred foreachcateno", v""i'in) iojusteo for the effectof the unwindingof the discount atebLwve"n1 Januaryand the assessment ateto the assessment ate'For2009 ,2o1o 'and2011theresu | tca |cu |a ted is thees t imatedvalue as at 30 lun! "nO 3i Oecemberof the SchemeAgent'sPor t fo | ioofC|a ims|ncurreddur ingeachCa|endarYear(n) , f romn=2007 to 2010; added to payments made on the SchemeA.gent'sPortfolioof-Cf"'tt Incuired for each

CalendarYear (n)adjusted for the "ff""t of the unwinding of the discount ratebetv.reen Januaryand the assessmentdate'This resuliwill be the Metric or the scheme Agent at each pointof time(i ) ForCalend r Year2006' 2OO7and 2008(t)' lC(n'a't)' orn=20O5 o ZOOZ nd t=2006 to 2008 [at 30 June and 31December f eachCalendarYear(n)l'(ii) For CalendarYear2009'2010'and 2011(t): C(n'a't)' or

n=20Q7 o ZOfOand t=2009 o 2011 [a t 30 Juneand 31

December f eachCalendarYear(n)l'A re l a t i v i t yw i | l t henbeca |cu la ted fo r theSchemeAgen t ' sPor t fo | ioofC|a imsincurredatassessmentt .Thecornpar isonofthese rerativities to

-irrg"t. at time (t) ryir! d_etermine hecontribution f the lncurredCostcomponent9lthg FOM measureto entitlemento paymentsas providedby Table4'5'1'

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4.5.6 For he purposes f carcuratingoM(lc) he claim Limitwillbeapplied.Schedule3 - RemunerationVersion: 2.0-12lO6nW9 AllianzAustaliaWorkers'Cornpensation,**"#?#

Item Formula / DesciptionRELIC(a,t)(t =20O6, 007,2OO8.2W9,2010,2011mid-pointndend)

= f lC(n,a,t);StC1n,",t) ; *er.== | lC(n,a,t)/ fSlC(n,a,t) Jovern =

For CalendarYear2006,2OO7. nd 2O082005 o t-1For CafendarYear2009,2O'10, nd ZO112007 to t- 1The relativity f the IncurredCost for the SchemeAgent'sPortfolio f Ct"irn. tn*r"Oin calendarYear n) at assessrnentime , comparedo theadjustedSchemebenchmark

lC(n,a,t)(n=2005, 006,2007,2008,2009.2010.2011t = 2006,2007,2OO8.2409.z01A.2011mid-pointndendttn)

The Incurred ost in respectof claims Incuned n year (n)of the SchemeAgent'sPortfolio. stimated s:i) the net Outstandingiability or accidentYear(n)accordingo the actuarial aluationas at time:added oii) the net payments o time from accidentyear (n). adjusted or the effectof theunr*inding f the discount ate betweendateof paymentand calculation a.te t) .Thisestimation ses he claims experience nd assumptionshe SA considersappropriateo the SchemeAgent'sportfolioof Claims

SIC(n) For CafendarYear2006, 2Oe7,and 2OO8ForCalendarYear 2009,2010, andZOll=lCR(2005)x Wages(n)=lCR(2007)x Wages(n)

TheSchemebenchmarkncunedCost or Calendar ear (n)SIC(n,a) = SIC(n)x lPOPrem(n,a) lPOPrem(n)The benchmarkncunedcost for the SchemeAgent n calendaryear (n)SIC(n,a,t) = SIC(n,a)adjusted or he effectof theunwinding f the discount ate o assessmentdate (t).The benchmarkncurredcost for the SchemeAgent n calendaryear (n), nflated oassessment ate(t)= JEarnedTPrem(l,n,a)n respectof all policiesfor the SchemeAgentPOPrem(n,a) The sum of EamedBasicTariffpremiumsforal l policiesfor the schemeAgent'sPortfolioor any exposureduringCalendar ear(n)lPOPrem(n) = fEarned rPrem(l,n,a) n respectof all pnliciesfor all schemeagents n calendarYear (n)The sum of EarnedBasicTariffpremium.inr"rptany exposureduringCqlendarYear (n)

ICR(2005) or 20O6,2N7.and2OOB = SIC(2005) Wages(2005)The bencfrma* tn*rruOassessment aluation s at 30 June2005ICR(20O7)or 2009,2O1O. nd2O11 = SIC(2004 Wages(2007)Thebenctrma*n.rr"assessmenlaluations at 31December007SIC(2005)or2006,2OO7.nd2OOS = SRP(2005)The scheme Risk Premiumfor calendar year (n) 2fi)5, accordlng o ft,u u"tuari"tassessment aluation s at 30 June 20O5= SRP(2007)IC(20O7) or 2009,2O1O. nd2Ali The SchemeRisk Premiumfor calendar year (n) 2007, aqording to the actuarialassessment aluation s at 31 December2007Wages(n) The SA estimateof Wages for Calendaryear (n)


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4.5.7

4.5.8

Schedule - RemunerationVersion:2.0 1206/2009

Schedule - RemunerationFor thepurposeso fca |cu |a t ingFoM( lC)S lC(n)w i | lbe reducedUV tn" bA'estimate of that part of SIC(n) in respect of thelncu r redCos to fanyC la imequa | too rg rea te r than theC |a imLimit.The FoM(lc) resultassessments il lbe calculated s follows'(i)

(ii)

For Performance ee calculations:sing he approach etout in section6.6, andFor ncentiveee and additionalncentiveee calculations.using he approach et out n section '6 '

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5 Assessment of Growth5.1 Galculationof growth in market share5.1.1 The calculation f growthapplies o schemeagents who havebaseline elativitiesor one or more metricsof less than 100.5.1.2 For each scheme agent he growth rom the baselineperiod othe remuneration eriodwill be assessed.5-1.3 This calculationwill be performed eparately or each CalendarYear n) or he RTW metricsand he FOM(IC)metric5.1.4 Growthwill be calculated s the change n the marketshare ofearned tariff premium. This represents he net growth of theagent.5.1.5 A guide to the periodsused fo r the calculation s shown inTable .1 .1 .

Table5.1.1(Ref:New)Performance BaselineMeasure Period PerformancePeriodRem Year 2OO6 Rem Year 2OO7 Rem Year2008RTW (26, 52 &78) 2OO4 2005/06 2006|07 2OO71O8FOM (lC) 2003 2005 Averageof Averageof2005+2006 2005+06+07

5.1.6 Growth for RTW and FOM(IC) is calculated according toTable .1 .2 .Table5.1.2(Ref:New)

Item Formula / DescriptionBM S (lC,a) = lPOPrem(2003,a) lPOPrem(2003)

The baselinemarketshareof earned ariffpremium or the SchemeAgent or theFOM(IC)metricBMS (RTW,a) = lPOPrem(2OO4,a)lPOPrem(2004)

The baseline marketshare of earnedtariff premiumfor the scheme Agent for the RTWmetricMS lC,n, a)(n = 2005,2006,2007)= lPOPrem(n,a) lPOPrem(n)The marketshare of eamed tariffpremiumfor the scheme Agent in calendar year (n)

MS(RTW, , a)(n = 2005/06,2006/07,2007n8)

= lPOPrem(n,a) lPOPrem(n)The marketshare of eamed tariff premium or the Scheme Agent in Year (n). WhereYear (n) is a financialyear running rom 1 July.to30 June indusive.

AMS lC,n. a)(n = 2006,2007.2m8)

= MS(IC,2005, ) for n = 2ffi6= [ MS(IC, 005, )+ MS(IC, f]o6, )l l2 forn = 20O7= [MS(IC, 005, )+ MS(IC. 006, ) + MS(IC, 007, )lt 3 torn = 2008

Schedule - RemunerationVersion: 2.0- lAAdnOOg

i'- i

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Schedule - RemunerationchemeAgent nThe actual markel share

= MS(RTW,2005/06, ) for n = 2006= MS(RTW,2006/07,a) for n -- 200-7^=tvtsiRtw,2oo7to8,) forn --2oo8AMS RTW, ,a)(n= 2006,2007,2008)

for the SchemeAgent in= AMS(IC, , a) - BMS(IC'a)GMS lC,n, a)(n= 2006,2007.2008) @OM(IC) for the SchemeAgent n Calendar

Year (n)= AMS(RTW,n, a) - BMS(RTW'a)GM S RTW, , a)(n = 2006,2007,2008) @r RTW or hescheme gentn carendar

ear n)

5.25 .2 .1

5.2.2

5.2.3

Schedule 3 - RemunerationVersion: 2.0-1Z06,n0o9

RevisedBaselineCalculationArevisedbase| ineca|cu|a t ionappl iesfor theSchemeAgentforCalendarYear(n), f:( i )Theg row th fo r theSchemeAgen t fo rCa lenda rYea r (n ) i sgreater hanzero' and(ii) The SchemeAgentBaselines less han 100%The calculations doneaccordingo Table5'2'1'The calculation is performeciseparately or each of RTW26'RTW52,RTWS and FOM(!C)'Table5.2.'!(Ref:New)

Thecalculationf updated aselines illnotbe possible ntil herequiredmarket haredata s available'(i) For RTW we require market share information orFinancial ear (n-1in). As a guide, his information il lbecomeavailabie uring he fourthquarterof CalendarYear n) .

Page41AtlianzAustraliaWorkers Compensafon (NSI/V)Lknited

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Formula DesciPtionfnu O"""tin" relativity or metric M for the SchemeAgent\ly'hereM is AVGDURN26(aMVGOUnNSZG)' AVGDURNTS(")W= [ nELtrtG) enrls{u, )* tooy" cus(tut' ' a) tAMS M'n' a)' -rh" ,*ioo base|ineror rrretricM, for the ScherneAgentfor CalendarYear (n)*--u, or I Reutt(a) , Alt RELM(a,n) ] for a schemeagentwith positivegrowth= RELM(a) for otherschemeagentsrn. ,po-"t"d uaselinerot t"tti"

ItemRELM(a)AltRELM(a,)(n= 2006,2007,2008)URELM(a,)(n= 2006,2007,2008)


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( i i


( i i i )

For FOM(IC) we require market share information forCalendar Year (n-1). As a guide, this informationwillbecomeavailable uring he secondquarterof CalendarYear(n).In the event that the updated baselines or each metricare required before the calculation of them can befinalised,he SA willuse he original aseline elativities.

Component Fee Calculationlf a schemeagenthas positive rowth or RTW or for FOM(IC) nCalendarYear (n) the SchemeActuarywill perfonnan altemativecomponentcalculation or the PerformanceFees, incentive eesand additional ncentive ees for that metric.The componentcalculationwill consider he Scheme Agent asmanaging wo portfolios:(i) An existingportfoliowhichhas the baselinemarketshare,and(ii) A growth portfoliowhich has a marketshare equal to theScheme Agents net growth in market share since thebaseline eriod.Separate ee calculationswill be performed or each of these twocomponentsub-portfolios nd a fee upliftwill be made if the surnof the fees from the componentsub-portfolioss greater han thefee that wouldapply or the combinedportfolio.A guide to the baseline relativities, argets and performanceresultsused or thesecalculationss shown n Table5.3.1.Table 5.3.1(Ref: New)

5.35 .3 .1

5 .3 .2

5 .3 .3

5.3.4

Portfolio BaselineRelativity Targets PerformanceandlncentiveResults Fee entitlements(for performance, ncentive andadditional ncentive fees)

Combined URELMportfolio (n, a)Calculated byreference tobaselinerelativity

RELM(a, )FrommonitoringoolsorAgent valuations

Calculated by^ (eferencetoA performanceresults^^a a^ - ^^ t ^or ru td r vEl)

Component : DtrrExistingportfotio xtt-M (a)Component 2.: fiOVoGrowth portfolio

Calculated byreference tobaselinerelativitiesandwill differ bycomponent

= RELM(a, ) x RELM(a)URELM n, a)

= RELM(a. ) x 100%URELM(n,a)

81 cabulated byreference toperformanceresults82 and targets

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Fee upliflUPliftaPPliesf sumof comPonentees

:^"' : exceedshe ee s62 - t\ from he combinedPortfolio

5.3.5 This calculation il l only be performedat the 31 March ollowingtheendo f theCa |enda rYea r (n )aspa r to f thewrapupcalculationsor the fees n respectof calendarYear n) '

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6 Performance Fees6.1 Definition& Apportionment6.1.1 The Performance ee Pool [PFP], exclusiveof GST, for eachCalendar ear n) s setout n Table6.1.16.1.2 The PFP for Year 2009 [PFP2009], ear 2O1OpFp20t0] andYear 2011 PFP2O11lmay be increasedor decreasedpro-rataby the percentage ariance n the numberof open Claims n theScheme at 30 June 2005 compared o the number of openClaims n he Scheme s at30 June2008.

Table6.1.1(Ref: ncludes chedule Table2.1)Item Formula DescriptionPFPf|-otal) = $260,000.000

The totafPerformance ee pool or calendar Year20o6,2oor and 2008, exclusiveof GSTPFP(2006) = PFPOotal)x 3Oo/" $78,000,000

Performance ee Pool or CalendarYear2006.exclusive f GSTPFP(2007) = PFPOotal)x30oh= $78.000,000

Performance ee Pool or CalendarYear 2007.exclusiveof GSTPFP(2008) = PFPCI-otal)4OYo $104,000,000

Performance ee Pool or CalendarYear2008.exclusiveof GSTPFP 200e) = $104,000,00OPerformance ee Pool or CalendarYear2009.exclusiveof GST

FF P(2010) = $104.000,00OPerformance ee Pool, or CalendarYear2010 exclusiveof GST

PFP 2011) = $104,000,0O0Performance ee Pool, or CalendarYear 2O11 xclusiveof GST

6.2 PerformanceFeeSub-Pools6.2.1 The PFP for calendarYear (n) [PFP(n)] s divided nto two sub-

pools being RTW sub-pool [PFRTW(n)] and FOM sub-pool[PFFOM(n)J. he total amount avaitabte or pFp(n) wiil becalculatedn accordance ith Table6.2.1.Table6.2.1(Ref: ncludesSchedule Table2.2)

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Item Formula / DescriptionPFRTW(n) = 30o/o PFP(n)

The Returnto Work proportionof the PerformanceFee poolPFFoM(n) = 7oo/o FFP(n)

The FinancialOulcome Measureproportionof the PerformanceFee pool


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6.36 3 .1

6.3.2

6 .3 .3

6.34

6.3.5

Sclredule 3 - RemunerationVersion: 2.O-1UO6|20[9' t . ;

Schedule - RemunerationPotentialPerformanceFeesThe Potential RTW Performance 1"" and Potential FOMPerformanceFee available n respect of the Scheme Agent incalendar year t"l--*iri be calculated in accordance withTable .3 .1 .The |n i t i a |Po ten t ia |FoMPer fo rnanceFeeswi | |beca lcu |a tedbasedonthemarke tsharemeasuresshown inTab le6 .3 . l .Th isinitialallocation f poGnii"r eeswill be increasedor anyAgent fan alternative.attocationased on the marketshar:e f ServiceFee producesb greateramount'Table6.3.1(Ref. ncludesSchedule Table2'3)

The'calculation of the Potential PerformanceFees fo r the;;";; Ajent in catendar year (n) will be finalisedusing data"r "i sr Mirch of the subsequentcalendar

year'l n theeven t tha t theca l cu |at i ono f thePo ten t i a |Pe r fo rmanceFees is required i"ior" the calculation of the PotentialperformanceFees roi$'" scheme Agent in calendar Year (n)can be finalised, it witl be estimated by the sA using thePSFMS(n,a)-For the purposesof calculatingPFRTW(n'a):( i )NPo l (n ) i s the to ta |numbero fPo l i c iesexc lud ingDomest i cpolicies ""r"i-ov or on behatfof the Nominal nsurer nCalendarYear(nj as provided y Section1'3'( i i )NPo l (n ,a ) i s the to ta l numbero fPo l i c i esexc lud ingDomesticpofrcies ssued by the SchemeAgent on behalfof the ruotin"t insurer n ialendar Year (n)' as providedbYSection 1'3;(iii) lPOPrem(n) s the Earned,-BasicTariff Premium or theScheme n CalendarYear(n);

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Formula DescriPtion )ltemPFRTW(n, ) PFRTW(n) [33.3%PotentialRTW Perform"

IPFFOM(n, ) = PFFOM(n) FOM(lnitialpotentiar orurpurio*ance Fee*.p*.nt ror he schemeAgent or calendarYear(n)= PFFOM(n) FS F

I AlternativePotentialrOft1p"rf-tance Fee *'n--po*ttt for the SchemeAgentfor CalendarYear

I (n )APFFOM(n, )

PFFOM(n, ) | = Ma x of I IPFFOM(n' a) , AHrruM(rr ' d' JI Potentiatrot "no,tffin" s"n"tu A


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6.3.6

6 .3 .7

6.3.8

Schedule - Remuneration(iv) lPOPrem(n, ) is the EarnedBasicTariffpremiumfor al lPolicies fo r the SchemeAgent's portfolio in CalendarYear(n);For he purposes f calculating FFOM(n, ):(i) FOM(n) s the FOM or Calendar ear (n) n respectof theScheme n that Year. This s calculated s follows:

(a) FOM(Liab) is calculated according to Table4 .2 .1 ;(b ) FOM(IC) s catcutatedor each year (t ) as theproduct of the Scheme wages according to theScheme valuation at 30 June of year (t ) andICR(2005)romTabte4.5.1.

(ii) FOM(n, a) is the FOM for Calendaryear (n ) fo r theSchemeAgent;The available proportionof PerformanceFees from pFRTW(n)and PFFOM(n) or the SchemeAgent are payableonly on theachievementby the SchemeAgent of yearly performanceFeeTargetsset by the sA relative o the scheme Agent'sportfolio.The available proportion of pFFOM(n,a) is subject to theprovisions et out n Section .9.

Targets for Payment of Perfonnance FeesInterim PerformanceFees are payable o the scheme Agent onmeetingHalf YearlyPerformance ee Targets.Yearly PerformanceFees are payable o the SchemeAgent onmeetingYearlyPerformanceFeeTargets.The PerformanceFee Targets are calculatedwith reference othe SchemeAgentsbaselineelativities.(i) The baselines relativities are updated according to .Section 5.2 for each metric M and Calendaryear (n )where the SchemeAgenthasdemonstrated rowth.(ii) Formulae for PerformanceFee Targets with respect tothe Scheme Agent's Portfolio baseline relativities areprovidedat Table6.4.1.

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6.46.4.1

6.4.2

6.4.3

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6.4.4

6.4.5

6.4.6

Schedule - Remunerationln determiningRELLiab(a)and RELIC(a)where C-laimsaremoved too r f romtheSchemeAgen t ,a t theD i rec t i ono f theNominal nsurerunderSub-clauses '7 , 8'8 or 8'9 of -theDeed'nit-r-iru(") and RELIC(a) will be adjusted.t1j:l:91. tu"hmovements by recalculatingRELLiab(a)and RELIC(a) and"OJing or subiracting he proportionof the FOM attributable

othoseClaims.Targetsand entrypoints or Performance ee paymentare givenby Table6.4.1.

Half YearlYPerformanceinterpolationbetween thearegivenbYTable6-4'2-Fee Targets will beYearly Performance

based on linearFee Target and

: . 1 d;'T' 1 ' : : T

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Table6.4.1(ref:Schedule Table2-13)Formula / DescriPtionTheupdatedbase|ine'"t"tiuityfortheSchemeAgentformetricMinCa|endarYearRELM(n,a)wheren =200,6,20O7,

and 2008 ffi); AVGDURN52(a);VGDURNTs(a)ndFoM(Liab)For CalendarYear2006,2OO7and20o,8For CafendarYear2009,2O1O' nd2011

= 85o/o (URELM(n,a) -75o/") x85"/o= 93.5% + (URELM(n,a) -75%1x66%TPER(n,a,M)wheren =2ffi6,2OO7,2008,2009,2O10and2011 entty point relativity or the SchemeAgent in respectof M= Lesserof uRELM(20O6, ) and 80%+ (uRELM(2006,a) 75%)x 70%]

1O0%PerformanceFee farget relativity or the SchemeAgent in respectof M at

@ 1% ) nd 8o % (URELM(2007'")7s"z")xss%lTP2007(a,M)tOO"Z""rto-ance Fee iarget relativity or the SchemeAgent in respecl of M at


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Table6.4.3(Ref: ncludes chedule Table2.1)

Item Formula / DesciptionTPl2

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