The NSW Labor has slammed the Treasurer’s embattled workers compensation agency iCare for publicly endorsing claims-management software it wasn’t using, after the company that was to provide the software paid for executives to visit Las Vegas.
iCare's former CEO and current Chief Operating Officer (COO) filmed a video endorsing Guidewire software in 2018.
However, iCare didn't finish deploying the software until March 2019, 13 months after iCare promised it would be ready.
iCare's CEO John Nagle resigned in early August after failing to disclose that Guidewire paid for him to fly to Las Vegas to speak at their convention.
In a media release issued today NSW Labor's Shadow Minister for Finance and Small Business, Daniel Mookhey said the incident showed appalling judgement:
"It was a terrible decision by iCares’s top executives to endorse software that was 13 months late, after the developer flew them to Las Vegas.
"Failing to deploy Guidewire on time and budget is a key reason why the NSW Worker’s Compensation scheme crashed.
"If iCare deployed this software on time, return to work rates in NSW would not have collapsed so badly.”
iCare's COO and CEO were the two highest paid executives at iCare in 2018. The CEO received a bonus worth more than $100,000. The COO's bonus was more than $200,000.
“The Treasurer owes employers and sick and injured workers an explanation about why iCare’s highly paid executives endorsed a commercial product that was 13 months late,” Mr Mookhey said.
"iCare provides workers compensation insurance to more than 326,000 businesses. It insures 3.6 million employees. The agency’s investment portfolio is worth $32 billion. The Treasurer created iCare in 2015. It has only ever answered to him."
NSW Labor's Shadow Minister for Finance and Small Business, Daniel Mookhey said
"Under Dominic Perrottet's stewardship:
• iCare handed $4 million in salary and bonuses to its eight top executives in FY 2019, despite the agency losing $873 million. 200 of its 1200 staff were also paid bonuses.
• iCare underpaid 52,000 workers up to $80 million.
• iCare overpaid dodgy doctors hundreds of millions of dollars in duplicate and fraudulent payments.
• iCare paid for two secret political advisors in Dominic Perrottet’s office.
• In February iCare tried to eject 17,500 workers from the workers compensation system to offset the scheme’s growing losses.
• iCare sought to hike employer premiums by 4% and introduce a 'gap fee' for injured workers needing to see a doctor.
• iCare is under investigation for paying $22 million to insurance brokers in breach of the law.
• iCare’s CEO resigned after it emerged that iCare handed his wife a contract.
• iCare’s CEO and another top executive took an undisclosed sponsored trip to Las Vegas paid for by a multi-million contractor to the agency.
• iCare’s top executives took a 36 foreign trips in four years - 10 times more than SIRA, their regulator.
• iCare faced an ICAC referral for handing an $11 million marketing contract to a company secretly owned by a top executive at the agency.
• Treasury in September 2019 secretly cancelled an external investigation into probity and governance at iCare after the former CEO complained.
• The State Insurance Regulatory Authority (SIRA) made referrals about iCare to the Independent Commission Against Corruption.
• A damning independent review found that in 46 percent of claims handled, iCare failed to follow the relevant law.
• iCare organised with the Treasury a secret $4 billion bailout of the workers compensation fund for police, nurses, prison guards and teachers to stop it collapsing.
• The Treasurer was warned in May that iCare was set to lose another $850 million before COVID-19 hit the scheme even harder.
• iCare racked up underwriting losses totalling $4.54 billion in the past three years.
• iCare's $3.9 billion surplus effectively disappeared, before COVID-19 affected investment returns.
"Despite this record Mr Perrottet told Parliament that iCare did a 'superb' job.
Mr Mookhey said: "The Treasurer has his head in the sand about the goings-on of his $32 billion agency. Sick and injured workers and employers have lost confidence in iCare.”
