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 69 Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 55 20. Unearned premium liability continued Premium Liability and Liability Adequacy Test 2015 2014 MACC TIO Insurance & Banking MAC Fund TIO TIO Insurance & Banking MAC Fund $000 $000 $000 $000 $000 $000 Central estimate of present value of expected future cash flows from future claims. 26,521 - 26,521 65,366 41,228 24,138 Central estimate of present value of expected future cash inflows arising from reinsurance recoveries on future claims (3,737) - (3,737) (10,858) (8,951) (1,907) Risk margin 3,853 - 3,853 8,444 4,306 4,138 Net premium liabilities 26,637 - 26,637 62,952 36,583 26,369 Risk margin percentage 16.91% - 16.91% 15.49% 13.34% 18.61% Probability of adequacy 75% - 75% 75% 75% 75% The liability adequacy test (LAT) assesses whether the net unearned premium liability less any related intangible assets and deferred acquisition costs is sufficient to cover future claims costs for in-force policies. Future claims costs are calculated as the present value of the expected cash flows relating to future claims, and includes a risk margin to reflect the inherent uncertainty in the central estimate for each portfolio of contracts, being MAC, Insurance Long Tail and Insurance Short Tail. The test is based on prospective information and is heavily dependent on assumptions and judgements. The liability adequacy test has identified a surplus for all contracts that are subject to broadly similar risks and are managed together as a single portfolio. As there is no deficiency in the unexpired risk liability as at the reporting date, no write down of deferred acquisition costs is required (2014 unearned premium in the MAC Fund was found to be deficient by $800k) The MAC Fund net deficiency adjustments in 2014 were reversed during the year. Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 54 19. Outstanding claims liability continued e) The maturity profile of MACCs discounted net outstanding claims provision is analysed below. 1 year or less > 1 year and < 5 years > 5 years Total 30 June 2015 $000 $000 $000 $000 Direct Insurance - - - - Inwards Reinsurance - - - - Total Insurance - - - - MAC Fund 37,621 94,958 247,308 379,887 Total discounted net outstanding claims 37,621 94,958 247,308 379,887 1 year or less > 1 year and < 5 years > 5 years Total 30 June 2014 $000 $000 $000 $000 Direct Insurance 23,979 39,526 30,542 94,047 Inwards Reinsurance 44 96 77 217 Total Insurance 24,023 39,622 30,619 94,264 MAC Fund 40,205 92,984 206,926 340,115 Total discounted net outstanding claims 64,228 132,606 237,546 434,379 20. Unearned premium liability 2015 2014 MACC TIO Insurance & Banking MAC Fund TIO TIO Insurance & Banking MAC Fund $000 $000 $000 $000 $000 $000 Unearned premium liability as at 1 July 31,266 - 31,266 105,315 73,856 31,459 Deferral of premiums on contracts written in the period 32,939 - 32,939 106,512 75,246 31,266 Earning of premiums written in previous periods (31,266) - (31,266) (105,315) (73,856) (31,459) Unearned premium liability as at 30 June 32,939 - 32,939 106,512 75,246 31,266


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