Territory Stories

Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)

Details:

Title

Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)

Other title

Tabled paper 1556

Collection

Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT

Date

2015-11-19

Description

Deemed

Notes

Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.

Language

English

Subject

Tabled papers

File type

application/pdf

Use

Copyright

Copyright owner

See publication

License

https://www.legislation.gov.au/Details/C2019C01622

Parent handle

https://hdl.handle.net/10070/273151

Citation address

https://hdl.handle.net/10070/799706

Page content

Northern Territory Motor Accidents (Compensation) Commission Notes to the Financial Statements - 30 June 2015Annual Report 2015 Page 45 Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 31 4. Insurance contracts risk management policies and procedures continued b) Terms and conditions of insurance and inwards reinsurance business The terms and conditions attaching to insurance contracts affect the level of insurance risk accepted by MACC. The majority of direct insurance contracts written are entered into on a standard form basis. All inwards reinsurance contracts are subject to substantially the same terms and conditions. There are no special terms and conditions in any non standard contracts that have a material impact on the financial statements. All insurance contracts written in the Northern Territory are subject to substantially the same terms and conditions. c) Concentration of insurance risk MACCs exposure to concentrations of insurance risk is lessened by a portfolio diversified into numerous classes of business. Specific processes for monitoring identified key concentrations are set out below. Risk Source of concentration Risk management measures Natural catastrophes Properties concentrated in regions that are subject to cyclones, floods and storm surges. MACC has modelled aggregated risk by postcode using commercially available catastrophe models with a specific MACC model developed in conjunction with Willis Re. Based on the probable maximum loss per the models, MACC purchases catastrophe reinsurance cover to limit exposure to any single event. d) Development of claims There is a possibility that changes may occur in the estimate of our obligations at the end of a contract period. The tables in note 19 show our estimates of total claims outstanding for each underwriting year at successive year ends. e) Interest rate risk Interest rate risk arises from insurance contracts due to the extent that there is an economic mismatch between the fixed-interest portfolios used to back the outstanding claims liabilities and those outstanding claims. The degree of matching is in accordance with approved risk tolerance. The interest rate risk can be managed by matching the duration profiles of the investment assets and the outstanding claims liability. f) Credit risk Financial assets and liabilities arising from insurance and reinsurance contracts are stated in the Statement of Financial Position at the amount that best represents the maximum credit risk exposure at reporting date. There are no significant concentrations of credit risk. Additional information relating to the ageing of premium debtors is included in note 33 (b).


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