Hon. Ken Travers questions the Treasurer regarding the Insurance Commission of Western Australia's solvency ratio policy, its basis, and review process. The Treasurer clarifies the policy setting and actuarial assessment involvement.

AnsweredQoN 66Legislative Council
Asked
18 February 2016
Portfolio
minister representing the Treasurer

QuestionView source ↗

INSURANCE COMMISSION OF WESTERN AUSTRALIA —
SOLVENCY RATIO POLICY
66. Hon KEN TRAVERS to the minister
representing the Treasurer:
(1) What is the
current government policy regarding the solvency ratio of assets over
liabilities for the Insurance Commission of Western Australia?
(2) Who set the policy?
(3) Is the policy based on actuarial
advice?
(4) If yes to (3) —
(a) who provided the actuarial advice
and when was it provided; and
(b) will the Treasurer table the
advice; and, if not, why not?
(5) When was the solvency ratio
policy last reviewed?

AnswerView source ↗

I thank the member for some notice
of the question.
(1) The Insurance
Commission's policy is to ensure that the organisation has sufficient
revenue from its insurance products to ensure sufficient assets are held to be
able to meet current and future claim payments.
(2) The board of commissioners of
the Insurance Commission of Western Australia set the policy.
(3) The policy is
based on insurance principles. Independent actuarial assessments are undertaken
twice each year to assess the sufficiency of premiums for RiskCover and the
third party insurance fund to meet current and future claim payments. The board
of the Insurance Commission sets solvency targets based on the organisation's
assessment of those reports. The actuarial assessments do not dictate or
recommend solvency ratios.
(4) Not applicable.
(5) The Insurance
Commission reports against, and assesses its financial performance against,
solvency targets several times each year and this is reported externally in the
annual report each year.

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