Monday, February 21, 2005

Troppo Bloggo and accident compensation

Local brisvegas bloggers are meeting up!
The organiser Mark writes for Troppo Armadillo. Recently Ken Parish, the founder of that collaberative blog, posted an interesting article concerning accident compensation. I wasn't overly excited til I saw the bit about the New Zealand scheme, the ACC. Haveing witnessed first hand the rorting of that system and also benefited numerous times from its payment scheme (and my multiple injuries!) I felt compelled to comment.

Heres my comment in case you can't be bothered visiting Mark. I would recommend it though - he sounds like an interesting bloke and I am looking forward to meeting him.

I am not related to John Miller, the author of the document discussing the origins and workings of the ACC in NZ. I am however a kiwi who has both benefitted and suffered from the ACC system. I am also aware of the large number of "ripoffs" that occur from the system, though the recent moves to limit the payouts have reduced that somewhat. However the weekly payment scheme is still being rorted heavily. The reason for the ACC's lack of full funding and its current carriage of liability from previous years is that it all but bankrupted itself. Hopefully the annuity type program now will allow the capital fund reserves the ability to generate the income needed to meet ongoing payment committments.
The missing information in this discussion so far is the inherent unfairness of the system.
Sure anybody is covered and the cases of non payment (like ollier mentioned above) dont exist, but likewise swain would never have received his abnormally huge payout either.
no the unfairness is the forced opt in. The concept of insurance from its earliest days was the gathering of like minded people financially to cover risk. Lloyds was established on this basis. All insurance around the world works this way. You choose to join and your premium is the cost of joining as an assesment of the additioanl risk you bring to the pool.
With ACC there is no choice. You are forced to pay (its deducted from your wages at source, or if you are an employer levied from you additional to the wage deduction).
The arguments for and against go like this:
If you are a careful manager of risk then you are unfairly 'taxed' or levied for an insurance you didnt need and may not have chosen to take given the choice.
if perchance you are the victim of crime, misfortune or pure accident then you are covered - fortunately though you did not prepare for that.
If however - and this is the one that bites - you are plain stupid, careless, accident prone or a worthy recipient of a darwin award, then you are covered for no additional cost even though you bring a greater risk to the pool. (there is no premium increase for continued multiple claims.) You may not even contribute (being a welfare recipient for example - i'm not picking on them so don't argue this point) but are still covered once again where you may have not chosen or been able to financially afford to do so.
Would be interested in further comments.